Logistics Management (MGT322) Assignment 2: Analysis and Solutions

This document provides a comprehensive solution to a Logistics Management assignment (MGT322) from the College of Administrative and Financial Sciences. The assignment addresses key concepts in logistics, including third-party logistics (3PL) firms, exploring their functions and examples like CEVA Logistics AG and BSL. It further analyzes motivational factors for companies going international, such as market size and diversification, and discusses the impact of offshoring on developing countries, using India as a case study. The solution also examines the logistics market in Saudi Arabia, focusing on the growth of 3PL services and highlighting BSL as a prominent player. The assignment covers topics like supply chain management, warehousing, and the benefits of outsourcing logistics operations. References are included for each of the concepts discussed.

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Answer 1: Third-party logistics firms or corporations:
The companies that are responsible for providing numerous services that are related to
the supply chain management are called third-party logistics firms. Supply chain management
is the process or the administration that involves the flow of raw materials into the final
products that can be made available to the customers (Daugherty, Stank & Rogers, 1996). It
helps in increasing the customer value in the market and also helps in having a competitive
advantage among the competitors in the market.
The third-party logistic companies are responsible for a number of processes, which
include transporting, warehousing, pick and pack, forecasting of the inventories present, the
fulfillment of the orders, and packaging of the products. Sometimes, they are also abbreviated
as 3PL or TPL. These companies help the organization to outsource the elements that are
required for the distribution and services for fulfillment (Jothimani & Sarmah, 2014). These
companies help the organization by assisting them in allocating that exact space of the store
and the time of staff that is needed for the holding of the inventory, which will also help in
fulfilling the orders. These companies help the organizations by saving the money that is
required for renting a space for the purpose of storage.
Using this type of companies helps in providing space to scale, and the organization
using this service can enjoy every aspect without making a transition between the ups and
downs in the market.
There are many players of third party logistics, and some of them are CEVA Logistics
AG, Saudi logistics, C.H. Robinson Worldwide, Inc., BSL, and many more.
Answer 2: Motivational factors for going international.
When an organization goes international, many opportunities are awaiting. Going
international or expanding in other ways helps the organization to learn and grow at the same

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time. The potential of the company also expands if the organization goes international. This
helps any organization in finding a new customer base, and even a new market is located
going international (Oladi, Beladi & Gilbert, 2014). There have been many factors associated
with the organization going international. Some of them are discussed below:
Size of the market:
Unlike in domestic country, the opportunity of business growth is more when an
organization goes international. It helps the organization to get a new set of people with a
variety of demands and wants, and also the economies of scale is maintained using this.
Stability through diversification:
Diversification is the key factor for the growth and sustainability of any organization,
and it should be considered and given the highest priority when an organization is thinking of
expanding internationally (Miyajima, Mohanty & Chan, 2015). Another key to be
sustainable and grow throughout is only by taking up the charge and by being proactive every
time as this will help in coming and coping with the future economic conditions.
However, apart from just these two factors, many factors motivate and organization to
go international, and these include the domestic saturation of the market, the new markets
that are emerging act as a competitor in the market, incentives for exports by government,
and the most important thing is the availability of skilled labors at a very low cost. All these
factors are considered by the organization when it plans to expand its wings and go
international.
Answer 3: Offshoring and developing countries
It is important to understand what offshoring actually means and also the importance.
Offshoring, in simple words, means to get the same work done in another country and not

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domestically (Urry, 2014). It helps an organization to get a bunch of talented and skilled
laborers at comparatively low wages that, too, at a faster rate than usual. Besides, an
advantage of specific and specialized skills is available with the organization using this
technique (Bandyopadhyay et al., 2017).
India is the best example that can be used here as an example of offshoring in
developing countries.
There are many factors of why India is chosen as an offshoring destination. Most of
the countries all over the world prefer this country for offshoring as the IT sector, BPO
sector, and many other markets of India are growing rapidly. There is an availability of a pool
of talented people and a very fast turnaround rate of time. The employees of this country are
highly devoted and also motivated very hard working. There is a very good communication
between the vendor and the customers when the business is outsourced to India as about most
of the people, or the majority is the English speaking population of the country.
A very prominent, as well as significant cost advantage is provided when an
organization offshores its business to India. The professionals of India are ready to work at
low wages as compared to the professionals of the U.S and the Europe. Besides, the cost of
infrastructure cost in India is comparatively more economical than any other country in the
world. Moreover, the management of labor in India is relatively easy than any other country.
Answer 4: Third-party logistics in Saudi Arabia
There has been a rapid marginal growth of the logistic market in Saudi Arabia over
the past five years, and there has been a prominence in the third party logistic services as
there is a complexity to manage the complex supply chains (Jazairy, Lenhardt & von
Haartman, 2017).
Company: BSL (Basket Service Logistics)

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BSL is a company based on the third-party logistics, and it has it headquarter in Saudi
Arabia and is among the top three 3PL companies across the country ("Basket Services For
Logistics", 2020). Providing customer and industry services, warehousing facility, and supply
chain management are the three things or services that the company is specialized in doing.
The location of its ware houses is in Riyadh, Saudi Arabia, and the categories of products that
the company deals with are the fashion and electronic goods. There are many other services
that the company provides, and they are flight and ocean freight, transportation, distribution,
and e-commerce solutions.

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References
Bandyopadhyay, S., Basu, A. K., Chau, N. H., & Mitra, D. (2017). Offshoring in Developing
Countries: Labor Market Outcomes, Welfare, and Policy (No. 2016-11).
Basket Services For Logistics. (2020). Retrieved 27 March 2020, from https://bslgroups.com/
Daugherty, P. J., Stank, T. P., & Rogers, D. S. (1996). Third‐party logistics service providers:
purchasers’ perceptions. International Journal of Purchasing and Materials
Management, 32(1), 23-29.
Jazairy, A., Lenhardt, J., & von Haartman, R. (2017). Improving logistics performance in
cross-border 3PL relationships. International Journal of Logistics Research and
Applications, 20(5), 491-513.
Jothimani, D., & Sarmah, S. P. (2014). Supply chain performance measurement for third
party logistics. Benchmarking: An International Journal.
Miyajima, K., Mohanty, M. S., & Chan, T. (2015). Emerging market local currency bonds:
diversification and stability. Emerging Markets Review, 22, 126-139.
Oladi, R., Beladi, H., & Gilbert, J. (2014). A Strategic Approach to Offshoring. Economics &
Politics, 26(1), 1-12.
Urry, J. (2014). Offshoring. John Wiley & Sons.