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Supply Chain Management

Selecting a Logistics Service Provider for a Manufacturing Firm: Issues and Suggestions

Article Details

Pub. Date	: Jun, 2019
Product Name	: The IUP Journal of Supply Chain Management
Product Type	: Article
Product Code	: IJSCM41906
Author Name	: Srishti Gupta and Nasina Jigeesh
Availability	: YES
Subject/Domain	: Strategic
Download Format	: PDF Format
No. of Pages	: 12

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Abstract

Logistics is an important activity for all manufacturing firms to distribute their products to the customers on time. The delays and any mishandling of the products may affect customer satisfaction and hamper the business of the firms. Adoption of good logistics by a firm can also contribute to maintaining competitive advantage. This paper attempts to understand the logistics of one big manufacturing firm in India engaged in fertilizers. It proposes the services of one service provider by taking into view several important issues like availability of trucks, distance and turnaround time and others, particularly from the perspective of the manufacturer. It also surveys three different multinational companies to understand the logistics solution adopted by them and their understanding of the issues related to the proposed service provider. In addition, the study also surveys three competent logistics service providers to understand their logistics model and their views on the service provider. Finally, the study attempts to come out with a logistics model to select a service provider.

Description

In a supply chain, movement of material and goods plays a very important role in meeting the requirement or demand. The risk and complexity involved in internal movement is almost negligible when compared with the external movement, wherein raw material and other requirements for manufacturing should come from selected sources related to vendors and finished goods should be delivered to the destinations related to customers. While doing so, there should not be any compromise on time, effort and quality; otherwise, loss of business will be the ultimate result. In order to address such important issue, logistics evolved as a special branch of business and its management became a continuous challenge for the business parties involved. Depending on the capabilities of the manufacturing firm, logistics is being handled either independently by creating and using in-house facilities or by outsourcing it to external agents or third party providers. Because of continuous focus and efforts required to attend the vital manufacturing processes and related issues, several big manufacturing companies are looking at outsourcing logistics activities to third party providers.

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