Stakeholder Advantages of a 3pl

{draw:a} Executive Summary: Logistics outsourcing can make a significant contribution to the competitive advantage and profitability of a company through its role in reducing costs and improving customer service, promoting company growth and shareholder value. In a country such as South Africa, where companies are under increasing pressure from both customers and shareholders to improve performance, and where the growth strategy is aimed at exports, logistics outsourcing can have an important impact. The main purpose of this assignment has therefore been to investigate the advantages that accrue to stakeholders when outsourcing logistics practices to third party logistics providers (3PL) and a discussion follows as to other value adding services that 3PL organisations can provide. Table of Contents: Introduction: According to the CLM (Council of Logistics Management), logistics is that part of the supply chain process that plans, implements and controls the effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customer’s requirements. For many companies, logistics represents a strategic competitive advantage due to the gains from operational efficiency such as reducing costs and improving communications; innovation; revenue generation through increased productivity; and customer satisfaction through improved service. Effective logistics management is able to provide a major source of competitive advantage to a company by ensuring that it is able to continuously respond faster, more effectively and efficiently than competitors, to customer requirements. Management need to understand their internal costs, market, core business and identify the business’s core competencies before deciding to outsource a function. The risks involved must be given due analysis. Companies are under tremendous pressure to cut costs, and improve customer service and

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