Analysis of the Risk Management Third-Party Logistics in China

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ANALYSIS OF THE RISK MANAGEMENT THIRD-PARTY LOGISTICS IN CHINA

Bachelor’s thesis Supply Chain Management Forssa 06.09.2012

Wang Haimeng

ABSTRACT

HAMK Forssa Degree Programme in Supply Chain Management Author Wang Haimeng Subject of Bachelor’s thesis Analysis of the Risk Management Third-Party Logistics in China ABSTRACT As the market competition continues to deepen and intensify, the enterprisess to establish a key of competitive advantages has been turned from reducing material comsumption and improving labor productivity to building efficient logistics system. With the further economic development, the enterprise put forward ever-increasing demands for the development of logistics. One’s own or collaborative logistics ways may not be able to fulfill some enterprises’s requirements, the enterprises that have new logistics demands are increasing as well, which are the motivation to promote logistics outsourcing. Simultaneously, with the development of modern traffic network, transport and high technology, also make the logistics enterprises have been repid progress, so more and more enterprises’ logistics outsourcing operations will be possible. Firstly, this thesis gives a brief review of relevant existing research results, on such a basis that it will seek to research whether and what kinds of risks exist in 3PL subcontracting and the effective approaches to deter and control thus risks in China. To sum up, the research objectives of the paper mainly include the following aspects:  To achieve a general overview of 3PL development in China  To obtain a deep understanding on risk and 3PL risk management  To explore the importance and approaches to manage risks  To identify various risks existed in 3PL risks  To research the root causes of these 3PL risks  To find out effective and efficient risk management methods Year 2012

Keywords Pages

Risk, Subcontracting, Outsource, 3PL 43

CONTENTS 1 INTRODUCTION ....................................................................................................... 1 1.1 Research background .......................................................................................... 1 1.2 Research objectives ............................................................................................. 2 1.3 Outline structure of this research ........................................................................ 2 2 LITERATURE REVIEW ............................................................................................ 3 2.1 Introduction ......................................................................................................... 3 2.2 The definition of risk ........................................................................................... 3 2.2.1 Risk is the indeterminacy of the possible outcome of a thing ................. 3 2.2.2 Risk is the indeterminacy of loss ............................................................. 3 2.2.3 Utilize the randomness characteristic of indeterminacy to define “risk” 4 2.3 Risk management ................................................................................................ 4 2.3.1 Contract management .............................................................................. 5 2.3.2 Risk sharing ............................................................................................. 5 2.3.3 Risk management procedures .................................................................. 5 2.4 Risk in 3PL .......................................................................................................... 6 2.4.1 General introduction of 3PL .................................................................... 6 2.4.2 3PL risks .................................................................................................. 7 2.4.3 Cause factors of 3PL risks ....................................................................... 7 2.4.4 Effects of 3PL risks...
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