Study of third party logistics selection and development in Singapore

• Main Author: Li, Xingxi
• Other Authors: School of Civil and Environmental Engineering
• Format: Final Year Project
• Language: English
• Published: 2014
• Subjects: DRNTU::Engineering::Maritime studies
• Online Access: http://hdl.handle.net/10356/61151
• Institution: Nanyang Technological University

Over the years, not only has the number of 3rd Party Logistics (3PL) users increased, but also, the extent of 3PL involvement in the entire supply chain has become greater than ever before. With the development of Supply Chain Management (SCM) concepts, a 3PL’s role is more than just operational, but strategic as well. Scholars refer to this kind of 3PL user-provider relation as a ‘strategic partnership’. The 3PL selection decision is therefore more critical. However so far, no attempt has been made to integrate SCM perspective with the 3PL selection issue, and to study how the decision-making process is. It is recognized that different firms carry out their 3PL selection processes differently, and there is no prescribed industrial standard. This paper takes on a SCM perspective and reports the outcome of a research on the issue of 3PL service provider selection in the cold chain industry in Singapore. A conceptual framework consisting of ten selection criteria was first developed through two stages: literature review, and an in-depth preliminary interview with an expert in cold chain logistics. A survey questionnaire was then designed based on pair-wise comparison principle of Analytic Hierarchy Process (AHP), to determine the average relative importance of each criterion in the cold chain industry in general. A systematic and numerical approach was worked out. Three additional in-depth interviews were included, to confirm and complement the proposed framework and procedure. The study generated a ranking of ten 3PL selection criteria in the cold chain industry in Singapore, where the most important three criteria are: cost competitiveness, people, and service quality. The research results suggested a gradually shifting focus of supply chain managers from ‘minimizing logistics cost’ to ‘maximizing the supply chain value’. After a cross comparison between three different industries, namely Fast-Moving Consumer Goods, Electrical & Electronic, and Cold Chain, it was concluded that different industries value the importance of selection criteria differently, but some commonalities can be observed at the same time.