Study of 3PL selection and development in Singapore
Date of Issue2014
School of Civil and Environmental Engineering
Due to the increasing competition globally, many companies have chosen to outsource their logistics functions and activities to external third party logistics (3PL) service providers. One of the important issues is how to select the most compatible, efficient and capable 3PL service providers. Extensive literatures have been published in the field of 3PL selection criteria determination. However the outcome varies from one research to another, depending on the specific industrial and geographical context in discussion. This research aims to address the gaps found in the literature by proposing a conceptual 3PL provider selection criteria framework which includes the most frequently cited factors, taking into account the characteristics of the Electronics and Electrical (EE) industry in Singapore. Through this study, which has employed a multitude of research methodology which includes literature review, establishment of a conceptual framework, preliminary interview, survey questionnaire and an industrial case-study, we aim to fill in the research gap to provide insight into the selection of 3PL service providers of EE industry in Singapore. We also aim to find out how has the 3PL selection criteria changed over the years as the concept of Supply Chain Management (SCM) develops in recent years. A comparison between EE industry and the Fast Moving Consumer Goods (FMCG) and Cold Chain (CC) industry will also be conducted, particularly in terms of how the 3PL selection criteria are similar or different across the three industries. Our findings show that EE industry users often consider the following factors in 3PL selection, by order of decreasing importance: Expertise, safety and security, cost competitiveness, company capability, compatibility, timeliness, service quality and flexibility. This finding is partly consistent with FMCG and CC sectors but there are unique distinctions as well, particularly in terms of how 3PL users evaluate the importance of service quality. From our surveys and interviews, we conclude that there has been a change in 3PL selection criteria over the years as the concept of SCM evolves. Nowadays, 3PL users often require 3PL providers to be able to handle more sophisticated and integrated logistic functions. Through this report, we hope to provide constructive perspectives in helping users, particularly SMEs from EE industry in Singapore, select appropriate and competent 3PL service providers in an effective manner.
Final Year Project (FYP)
Nanyang Technological University