Sheen and Tai [35] conducted a study of 64 firms from in direct sales in Taiwan and showed that the selection criteria of 3PL depend on history, capitalization and revenues of a company. For instance, a company with history between 3 and 10 years views ability and compatibility of 3PL more important than a company with history of less than 3 years. Similarly, the companies with capitalization between NT$10 and NT$50 millions view the quality, cost and accommodation more important than the companies with capitalization smaller than NT$10 millions.
In their empirical study with 7 European manufacturers operating in several industrial sectors, Mortensen and Lemoine [36] showed that the reasons for selecting a specific 3PL and entering into the cooperation are primarily related to the quality and reliability of the transport and delivery and thereafter to the 3PL market coverage, especially at the international level. Price and competences are also considered in this selection.
The exploratory study conducted by Briggs et al. [37] with 109 membership of the Council of Supply Chain Management Professionals on the influence of 3PL velocity performance showed that 4 criteria are considered, namely: speed of service, reliability, information accessibility, and services availability.
Moreover, in their study of 37 logistics providers in US, Leahy et al. [38] provided a list of 25 factors for the successful of 3PL/ customers relationships. These factors are in this importance order: customer orientation, dependability, change orientation, timeliness, convenience, control and performance appraisal, improved service, mutual trust and consideration, focus on core competency, total organizational involvement, knowledge of customer operations, cost savings, long-term relationships, management expertise, sharing relevant information, access to latest technology, financial strength, channel perspective, sharing of common goals, guidelines exit to resolve disputes, number of services offered, sharing of benefits and risks, provider's knowledge of external environment, exit provisions exist, and sharing human resources and facilities.
Tate [39] provided 7 factors that have made possible the long-term relationship between 3PL and their customers and which are: compatibility, deep understanding of a partner's business needs, open communications, commitment, fairness, flexibility, and trust.
As per [40], the author proposed to use agency theory to assist 3PL/customers relationships success. Cost reduction and services improvement criteria are most expected by clients to avoid conflicts with their 3PL.
To help make the relationship with 3PL successful, Aghazadeh [41] presented 5 relevant factors, which are: similar value and objectives, information technology systems, trust, mutual respect, and shared willingness to make the relationship work. He also illustrated the five steps involved in this selection, which are: making a decision on the necessity of using a 3PL, developing criteria and objectives which the provider should meet, the process of weeding out by making a list of possible 3PL, determining the top prospect to meet the potential 3PL, and beginning the new partnership with the chosen provider.
In the empirical work with 142 firms in UK and Ireland, Sinkovics and Roath [42] showed that a manufacturer and 3PL relationship is impacted by customer orientation, operational flexibility, competitor orientation, and collaboration. Four indicators are suggested to measure 3PL performance which are: improved service levels, reduced cycle time, efficient handling of exceptions, and improved end-customer satisfaction.
In their survey conducted in US, Knemeyer and Murphy [43–45] showed that 9 key dimensions of relationship marketing that influence the 3PL performance are trust, communication, opportunistic behavior, reputation, satisfactory prior outcomes, specific investments, attachment, dependence, and reciprocity.
In their empirical study conducted among 105 firms in US, Yan et al. [46] demonstrated that relational commitment and trust of suppliers/3PL are important for firms in developing stable relationships with their suppliers in supply chain alliance, which in turn is critical for alliance performance.
Finally, Chu and Wang [47] conducted a survey with 134 members of China Federation of Logistics and Purchasing, in order to examine the drivers that impacted the 3PL and customers relationship quality. The study showed that 4 main factors positively influenced that relationship, namely: 3PL importance, logistics performance (delivery, value-added services, flexibility, quality), information sharing, and legal contract.
As shown by the various studies discussed above, 3PL selection is a multi-objective decision because it requires taking into account several criteria. In addition, the number of firms involved in these studies is high, which demonstrates the importance of this decision. Finally, the activities most outsourced are transportation and warehousing.
To solve this multi-objective problem, the existing literature proposes some methods which are detailed in the following section.
4. Selection methods of 3PL
Based on our investigation, the different techniques used for the performance measuring of 3PL can be classified on 5 categories: multi attribute decision-making (MCDM) techniques, statistical approaches, artificial intelligence, mathematical programming, and hybrid methods. We referred to the recent study of Chai et al. [48] to use this categorization and also to the studies cited in [49,50] for further explanation of these methods.
In the following, Sections 4.1–4.4 present the studies that proposed individual approaches, and Section 4.5 presents those that combined several methods. Individual approaches are particularly proposed to demonstrate their application in the 3PL selection.
4.1. Multi attribute decision-making (MCDM) techniques
MCDM is a methodological framework that aims to provide decision makers a knowledgeable recommendation amid a finite set of alternatives, while being evaluated from multiple criteria. The main MCDM methods used in the case of 3PL selection are: Analytic Hierarchy Process (AHP), Analytic Network Process (ANP), Interpretive Structural Model (ISM), Technique for Order Preference by Similarity to Ideal Solution (TOPSIS), Multi-criteria optimization and compromise solution (VIKOR), Decision-Making Trial and Evaluation Laboratory (DEMATEL), Elimination and Choice Expressing Reality (ELECTRE), Fuzzy Sets Theory (FST), utility theory, and Quality Function Deployment (QFD). Only 7 of 67 articles (10.45%) applied some of these individual methods.
In [51], AHP is used to select the best 3PL warehousing in processing industry according to 3 main criteria, namely: reliability, flexibility, and strategic compatibility. Each one is defined by a set of sub-criteria. So et al. [52] applied AHP to evaluate the service quality of 3PL in Korea. This service takes into account 5 quality dimensions which include tangibles, reliability, responsiveness, assurance, and empathy. In [53], AHP is used to select 3PL in the case of a Turkish automotive industry. A total of 27 criteria were considered with respect to the general company considerations (price, financial considerations, experience in the same industry, location, asset ownership, international scope, growth forecasts, yearly efficiency), capabilities (optimization capabilities, creative management, customer service, supply chain vision, responsiveness), quality (service quality, continuous improvement, KPI measurement and reporting), client relationship (availability of top management, cultural fit, service cancellation, reputation) and labor relations (human resource policies, availability of qualified talent).
ANP approach, which is a more general form of AHP, represents the interdependencies of the higher-level elements from lower-level elements and also of the elements within their own level. Meade and Sarkis [54] used ANP for selecting 3PL in the context of reverse logistics. For such, 4 organizational performance criteria are considered, which are time, quality, cost, and flexibility. As per [55], ANP is applied to classify the 3PL criteria selection into 3 levels. The first one contains strategic criteria or determinants which include compatibility, cost, quality, and reputation. At the second level, the dimensions, which support the achievement of the upper-level determinants, are identified as well long-term relationship, operational performance, financial performance, and risk management. The last level contains 16 enablers, which support their respective dimensions and have some interdependences among themselves. Similarly, Cheng and Lee [56] used this approach for selecting reverse 3PL in high-tech manufacturing in Taiwan. The main criteria used are related to warehouse, transportation, IT, and value-added services. Each criterion is defined by a set of factors.
Finally, Govindan et al. [57] used ISM model to illustrate the interactions among 3PL selection criteria, in the case of reverse supply chain. The 7 attributes considered are services, reverse logistics functions, organizational role, customer satisfaction, impact
of 3PL use, organizational performance, and IT applications. A total of 35 sub-attributes are identified and the model is applied to a tire manufacturing company in India.
Sheen and Tai [35] conducted a study of 64 firms from in direct sales in Taiwan and showed that the selection criteria of 3PL depend on history, capitalization and revenues of a company. For instance, a company with history between 3 and 10 years views ability and compatibility of 3PL more important than a company with history of less than 3 years. Similarly, the companies with capitalization between NT$10 and NT$50 millions view the quality, cost and accommodation more important than the companies with capitalization smaller than NT$10 millions.
In their empirical study with 7 European manufacturers operating in several industrial sectors, Mortensen and Lemoine [36] showed that the reasons for selecting a specific 3PL and entering into the cooperation are primarily related to the quality and reliability of the transport and delivery and thereafter to the 3PL market coverage, especially at the international level. Price and competences are also considered in this selection.
The exploratory study conducted by Briggs et al. [37] with 109 membership of the Council of Supply Chain Management Professionals on the influence of 3PL velocity performance showed that 4 criteria are considered, namely: speed of service, reliability, information accessibility, and services availability.
Moreover, in their study of 37 logistics providers in US, Leahy et al. [38] provided a list of 25 factors for the successful of 3PL/ customers relationships. These factors are in this importance order: customer orientation, dependability, change orientation, timeliness, convenience, control and performance appraisal, improved service, mutual trust and consideration, focus on core competency, total organizational involvement, knowledge of customer operations, cost savings, long-term relationships, management expertise, sharing relevant information, access to latest technology, financial strength, channel perspective, sharing of common goals, guidelines exit to resolve disputes, number of services offered, sharing of benefits and risks, provider's knowledge of external environment, exit provisions exist, and sharing human resources and facilities.
Tate [39] provided 7 factors that have made possible the long-term relationship between 3PL and their customers and which are: compatibility, deep understanding of a partner's business needs, open communications, commitment, fairness, flexibility, and trust.
As per [40], the author proposed to use agency theory to assist 3PL/customers relationships success. Cost reduction and services improvement criteria are most expected by clients to avoid conflicts with their 3PL.
To help make the relationship with 3PL successful, Aghazadeh [41] presented 5 relevant factors, which are: similar value and objectives, information technology systems, trust, mutual respect, and shared willingness to make the relationship work. He also illustrated the five steps involved in this selection, which are: making a decision on the necessity of using a 3PL, developing criteria and objectives which the provider should meet, the process of weeding out by making a list of possible 3PL, determining the top prospect to meet the potential 3PL, and beginning the new partnership with the chosen provider.
In the empirical work with 142 firms in UK and Ireland, Sinkovics and Roath [42] showed that a manufacturer and 3PL relationship is impacted by customer orientation, operational flexibility, competitor orientation, and collaboration. Four indicators are suggested to measure 3PL performance which are: improved service levels, reduced cycle time, efficient handling of exceptions, and improved end-customer satisfaction.
In their survey conducted in US, Knemeyer and Murphy [43–45] showed that 9 key dimensions of relationship marketing that influence the 3PL performance are trust, communication, opportunistic behavior, reputation, satisfactory prior outcomes, specific investments, attachment, dependence, and reciprocity.
In their empirical study conducted among 105 firms in US, Yan et al. [46] demonstrated that relational commitment and trust of suppliers/3PL are important for firms in developing stable relationships with their suppliers in supply chain alliance, which in turn is critical for alliance performance.
Finally, Chu and Wang [47] conducted a survey with 134 members of China Federation of Logistics and Purchasing, in order to examine the drivers that impacted the 3PL and customers relationship quality. The study showed that 4 main factors positively influenced that relationship, namely: 3PL importance, logistics performance (delivery, value-added services, flexibility, quality), information sharing, and legal contract.
As shown by the various studies discussed above, 3PL selection is a multi-objective decision because it requires taking into account several criteria. In addition, the number of firms involved in these studies is high, which demonstrates the importance of this decision. Finally, the activities most outsourced are transportation and warehousing.
To solve this multi-objective problem, the existing literature proposes some methods which are detailed in the following section.
4. Selection methods of 3PL
Based on our investigation, the different techniques used for the performance measuring of 3PL can be classified on 5 categories: multi attribute decision-making (MCDM) techniques, statistical approaches, artificial intelligence, mathematical programming, and hybrid methods. We referred to the recent study of Chai et al. [48] to use this categorization and also to the studies cited in [49,50] for further explanation of these methods.
In the following, Sections 4.1–4.4 present the studies that proposed individual approaches, and Section 4.5 presents those that combined several methods. Individual approaches are particularly proposed to demonstrate their application in the 3PL selection.
4.1. Multi attribute decision-making (MCDM) techniques
MCDM is a methodological framework that aims to provide decision makers a knowledgeable recommendation amid a finite set of alternatives, while being evaluated from multiple criteria. The main MCDM methods used in the case of 3PL selection are: Analytic Hierarchy Process (AHP), Analytic Network Process (ANP), Interpretive Structural Model (ISM), Technique for Order Preference by Similarity to Ideal Solution (TOPSIS), Multi-criteria optimization and compromise solution (VIKOR), Decision-Making Trial and Evaluation Laboratory (DEMATEL), Elimination and Choice Expressing Reality (ELECTRE), Fuzzy Sets Theory (FST), utility theory, and Quality Function Deployment (QFD). Only 7 of 67 articles (10.45%) applied some of these individual methods.
In [51], AHP is used to select the best 3PL warehousing in processing industry according to 3 main criteria, namely: reliability, flexibility, and strategic compatibility. Each one is defined by a set of sub-criteria. So et al. [52] applied AHP to evaluate the service quality of 3PL in Korea. This service takes into account 5 quality dimensions which include tangibles, reliability, responsiveness, assurance, and empathy. In [53], AHP is used to select 3PL in the case of a Turkish automotive industry. A total of 27 criteria were considered with respect to the general company considerations (price, financial considerations, experience in the same industry, location, asset ownership, international scope, growth forecasts, yearly efficiency), capabilities (optimization capabilities, creative management, customer service, supply chain vision, responsiveness), quality (service quality, continuous improvement, KPI measurement and reporting), client relationship (availability of top management, cultural fit, service cancellation, reputation) and labor relations (human resource policies, availability of qualified talent).
ANP approach, which is a more general form of AHP, represents the interdependencies of the higher-level elements from lower-level elements and also of the elements within their own level. Meade and Sarkis [54] used ANP for selecting 3PL in the context of reverse logistics. For such, 4 organizational performance criteria are considered, which are time, quality, cost, and flexibility. As per [55], ANP is applied to classify the 3PL criteria selection into 3 levels. The first one contains strategic criteria or determinants which include compatibility, cost, quality, and reputation. At the second level, the dimensions, which support the achievement of the upper-level determinants, are identified as well long-term relationship, operational performance, financial performance, and risk management. The last level contains 16 enablers, which support their respective dimensions and have some interdependences among themselves. Similarly, Cheng and Lee [56] used this approach for selecting reverse 3PL in high-tech manufacturing in Taiwan. The main criteria used are related to warehouse, transportation, IT, and value-added services. Each criterion is defined by a set of factors.
Finally, Govindan et al. [57] used ISM model to illustrate the interactions among 3PL selection criteria, in the case of reverse supply chain. The 7 attributes considered are services, reverse logistics functions, organizational role, customer satisfaction, impact
of 3PL use, organizational performance, and IT applications. A total of 35 sub-attributes are identified and the model is applied to a tire manufacturing company in India.
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