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Third Party Logistics Decision-making
This article comes from the "paper area". Please indicate the source website in the form of link:/2006/1-14/18324.html.
Adopting third-party logistics can reduce costs and improve customer service. Undoubtedly, in the construction of supply chain, an inevitable problem is the third-party logistics decision. At present, few people can really find solutions to these problems, which enterprises should implement third-party logistics and to what extent they should use it. This paper attempts to put forward a new research framework, that is, the strategic view based on enterprise logistics.
1, traditional decision-making method
The traditional decision-making basis is whether the enterprise has the ability to support its own logistics. If the enterprise has facilities and technology, it will be self-sustaining and easy to control. If a logistics function has some difficulties in self-management, it will be outsourced. When enterprises make such outsourcing and self-management decisions, the consideration of total logistics cost and customer service level is secondary. Usually, logistics outsourcing refers to enterprises purchasing transportation services from transportation companies or warehousing services from warehousing enterprises. These services are limited to one or a series of scattered logistics functions, and the demand is temporary. Logistics companies do not provide unique logistics services according to the unique business processes of enterprises, that is, logistics services are loosely connected with enterprise value chains.
Why do you adopt this decision-making standard? The reason is:
(1) The standard style of each functional department of an enterprise. The inventory management department hopes to have a warehouse to avoid shortage; Purchasing and transportation departments tend to have transportation equipment to facilitate delivery and delivery; The financial department finds frequent financial procedures annoying and prefers self-operated logistics; Starting from the stable and harmonious relationship between employees, the personnel department hopes that enterprises will not outsource logistics business. All departments are based on local interests and standards and don't want to bring unnecessary trouble to themselves.
(2) Out of fear of opportunism. After signing the logistics service outsourcing contract, the logistics business will be taken care of by the logistics company, and the strength comparison between the two sides will change accordingly. As far as logistics enterprises are concerned, they are dependent on non-logistics enterprises, but they are not strong. This transaction is at best one of its many transactions; But for non-logistics enterprises, service quality and efficiency will have a serious impact on the normal production and operation activities of enterprises. Therefore, logistics companies often take advantage of this favorable position to deceive each other, raise prices when necessary, and turn to customers who can meet their interests, resulting in various opportunistic behaviors, such as not delivering goods according to the time stipulated in the contract, deliberately threatening when loading and unloading, and so on. Because people can't ask for help freely, enterprises always try their best to adopt self-management, but this method weakens the competitiveness of enterprises: self-management makes enterprises waste limited resources on logistics that has little to do with their core business, which restricts the cultivation and consolidation of their core competence.
(3) Fear of losing the ability to control logistics. Enterprises are always willing to internalize logistics business, and the deep reason is that they are worried that they will lose their control over logistics after outsourcing logistics business. This kind of worry is unreasonable, because the best logistics design scheme is to find a balance between self-management and outsourcing. No one would suggest that an enterprise must outsource all its logistics business. Outsourcing strategy is to buy logistics functions with relatively low price and high customer service level externally, while focusing on those logistics functions that can support the core competence of enterprises internally. But this kind of worry is worrying in itself, because managers lack the understanding of the strategic significance of logistics in their understanding of outsourcing logistics, and they don't know which logistics functions will have a strategic impact on the development of their own enterprises and which will not.
In short, managers are faced with a series of uncertain factors, such as unknown technology, uncontrollable economic environment, variability of service providers and so on. And their prejudice against decision-making mainly comes from these uncertain factors. Managers are not clear about the core logistics functions and lack the will and confidence to make strategic analysis of logistics.
2. The decision criteria of balloon development.
With the rapid development of information technology, the relationship between non-logistics enterprises and logistics enterprises is also changing. Logistics companies have changed from providing traditional public logistics services to providing third-party logistics services, while non-logistics companies emphasize the high integration of supply chain management and various functional departments. Non-logistics companies and logistics companies tend to form alliances, and fraud and betrayal between enterprises will be limited, so the decision-making criteria to adapt to this change in service relationship will also change.
Barlow noticed the limitations of traditional decision-making criteria and put forward two-dimensional decision-making criteria. He believes that the decision of self-management or outsourcing services is mainly based on two factors-the degree of influence of logistics on the success of enterprises and the ability of enterprises to manage logistics. Logistics is very important to the success of enterprises. When the ability of enterprises to handle logistics is relatively low, third-party logistics is adopted. Logistics is of low importance to the success of enterprises, and the ability of enterprises to handle logistics is also low, so outsourcing public logistics services; Logistics is very important to the success of enterprises, and the ability of enterprises to handle logistics is also high, so the self-operated mode r 1 is adopted. Focusing on the strategic goal of the enterprise, seeking the strategic balance of the logistics subsystem itself is the biggest feature of the decision-making standard he established. Nevertheless, the decision-making standard he established has a fatal flaw: it does not consider the impact of cost. Generally speaking, each specific logistics system includes a set of decisions made by warehouse quantity, location, scale, transportation policy, inventory policy and customer service level. Therefore, every possible logistics scheme implies a set of total costs, which can be expressed by the following mathematical formula:
D=T+S+L+Fw+Vw+P+C
Among them, D is the total cost of logistics system, T is the total transportation cost of the system, S is the inventory maintenance cost, including inventory management cost, packaging cost and rework cost, L is the batch cost, including material processing cost and purchasing cost, Fw is the total fixed storage cost of the system, Vw is the total variable storage cost of the system, P is the order processing and information cost, which refers to the cost of order processing and extensive communication in logistics activities, and C is the customer service cost. For example, when considering reducing the number of warehouses, although it is to reduce the storage cost, reducing the number of warehouses will bring the consequences of longer transportation distance and increased transportation times, leading to increased transportation costs; If the increase of transportation cost exceeds the decrease of storage cost, the total logistics cost will increase, so it is meaningless to reduce the number of warehouses. When choosing and designing a logistics system, we should test the total cost of the system and finally choose the logistics system with the lowest cost. Therefore, the decision-making standard without considering the cost is an incomplete standard.
3, the third party logistics decision criteria
Considering the defects of Barlow's decision-making standard, this paper thinks that when making the third-party logistics decision, we should proceed from the strategic position of logistics in the enterprise and evaluate the cost on the basis of considering the logistics ability of the enterprise. In practice, the following decision-making procedures can be followed.
When making decisions on the third-party logistics, we should first consider the strategic importance of the logistics subsystem. To determine whether the logistics subsystem constitutes the core competence of an enterprise, it can generally be identified from the following aspects:
(1) Do they highly affect the business processes of enterprises?
(2) Do they need relatively advanced technology to enable the company to take the lead in the industry?
(3) Can it not be imitated by other enterprises in the short term?
If we can get a positive answer, then we can draw a conclusion that the logistics subsystem has important strategic significance. Because the logistics system is a multi-functional aggregate, the importance and relative ability level of each function in the system are unbalanced, so it is necessary to analyze each function.
Whether a function has strategic significance depends on its substitutability. If its substitutability is weak, few logistics companies or logistics companies are difficult to complete, and almost only this enterprise has this ability. Enterprises should protect and develop this function to maintain its strong competitiveness. On the other hand, if the logistics enterprise can also complete this function or the logistics subsystem is not very important to the enterprise, it is necessary to decide whether to be self-operated or outsourced from the perspective of the logistics capability of the enterprise. The enterprise logistics capability here refers to the level of customer service. Customer is a general concept, which can be both the consumer and the next working procedure. If the enterprise is unable to meet a certain level of customer service, it is necessary to outsource. What kind of service to use when outsourcing, whether to lease public logistics services or form a logistics alliance, depends on the importance of logistics subsystem to the success of enterprises. In the case that the logistics subsystem constitutes an enterprise strategic subsystem, in order to ensure the continuity of logistics, it is necessary to sign a long-term contract with the logistics company, which will provide customized services according to the enterprise process, that is, implement third-party logistics; However, in the case that the logistics subsystem does not constitute an enterprise strategic subsystem, what kind of service model should be adopted is to find a balance between customer service level and cost.
Having the ability of logistics does not mean that an enterprise must manage logistics by itself. It also needs to be compared with logistics companies with lower costs under a certain customer service level. Only when the relative cost of the enterprise is lower, it is beneficial to choose the self-operated mode. Otherwise, enterprises should distinguish this function and implement logistics outsourcing. If the logistics subsystem is an enterprise's non-strategic system, the enterprise should also look for partners and sell logistics services to them to avoid wasting resources. Of course, this kind of logistics service income is not the main income of enterprises. 7SI7BIKU93
This article comes from the "paper area". Please indicate the source website in the form of link:/2006/1-14/18324.html.