Outsourcing and global supply chain management

As a result of globalisation, supply chains of many large business organizations nowadays tend to become very long and complex. The traditional simple linear supply chains are quickly replaced by extended supply chain networks comprising not only suppliers, manufacturers, distributors, and end customers, but also service providers. With the increasing use of third-party logistics (3PL) service by international firms, many global 3PL providers are forming partnerships with large corporations to take care of the latter¿s logistics operations in different regions. The management of global supply chains therefore involves not only the maintenance of relationships with suppliers and distributors but also third-party logistics providers. This paper investigates the role of 3PL providers in global supply chain management and proposes a framework for evaluation of 3PL providers as global logistics partners for international firms. The framework focuses on the core competencies of the 3PL provider and its abilities to achieve economies of scale for its users so as to assist them to achieve their outsourcing goals and objectives.