Introduction
The current growth rate recorded at Lifestyle International (LI) calls for a new logistical strategy to meet the demands of the increasing number of clients in the Gulf Corporation Council (GCC) market. The decision to contract the delivery and storage operation to a third-party logistics service provider (3PL) is necessary to ensure that processes are completed seamlessly. Before selecting a reliable 3PL, it would be required for the leaders at LI to take into consideration several critical factors (Darko & Vlachos, 2022). Such a decision is essential if the company meets its obligations, supports the promoted business strategy, and achieves the outlined aims. The specific aspects for LI to monitor before selecting the best 3PL are described below.
Aspects of Selecting the Optimal Third-Party Logistics Service Provider
Assessing the Capability of the Intended 3PL
First, the professionals at LI should begin by monitoring and assessing the capability of the intended 3PL. The successful logistical services provider should have the resources and procedures to meet LI’s changing business expectations. A balanced view is crucial to ensure that the recruited 3PL is flexible, capable of completing the assigned activities diligently, and possesses the necessary expertise to deliver the intended aims (Magento, 2022).
The possession of competent workers and coordinators to complete the much-needed roles is essential to ensure that the 3PL organization achieves its goals. These include the ability to provide an IT interface with the company’s staff based in Dubai, complete deliveries, arrange the required customs clearances, prepare export documentation, and provide adequate storage.
Evaluating the 3PL’s Business Strategy in the GCC Market
Second, the successful candidate for the 3PL position should have a reputable business strategy in the broader GCC market. Magento (2022) argues that reputable logistical companies tend to promote a culture of meeting customers’ needs. They will go further to consider evidence-based approaches to ensure that the demands of all stakeholders, such as vendors, clients, and workers, are identified and addressed in a timely manner. Those in leadership engage the involved parties to address emerging issues and consider new ways of supporting their expectations.
For LI, it will be necessary to select a reputable organization that is acceptable and has a long history of finding solutions to emerging problems. This factor is capable of supporting performance and making sure that timely results are eventually recorded.
Considering the 3PL’s Experience with Self-Care and Pharmaceutical Products
Third, LI manufactures self-care and pharmaceutical products that are used directly by the intended customers. A positive brand image needs to be maintained if the organization is to continue attracting more people to support performance. Such an attribute explains why the most successful 3PL should be in a position to offer security and safety.
The selected logistics provider needs to update its initiatives while focusing on compliance. This aspect is necessary to maximize the overall safety of LI’s products (Tripathi, 2020). Additionally, the 3PL will be expected to safeguard the financial and other confidential information associated with the company. An excellent place to consider is the possession of the major certifications for 3PLs in the GCC.
Importance of Advanced Technology in the 3PL Selection
Fourth, the current requirements for a 3PL explain why LI needs to consider a company that possesses advanced or modern technology. This resource will ensure that inventory data is maintained in a timely manner while at the same time lowering costs. The availability of an online platform or interface will ensure that the changing demands of the targeted suppliers and distributors are met (Darko & Vlachos, 2022). The technology will support the packaging and manufacturing processes to ensure that the intended goals are recorded within the stipulated time. The technology will be instrumental in supporting shipping while tracking containers in real-time.
The Role of Location in Choosing the Optimal 3PL
Finally, location is a critical attribute that has the potential to guide LI to select the most appropriate 3PL. Currently, the organization intends to distribute its finished products in the broader GCC market. The contracted 3PL needs to have recognized operations in the region characterized by fulfillment centers and an expansive network. Its presence in different countries will make the process seamless and minimize some of the possible inconveniences that might arise (Magento, 2022). Its presence in other regions will make it possible for the involved workers to resolve disputes efficiently. This approach will make it possible for LI to expand its reach and eventually record positive gains.
Information Systems Requirements
Business organizations expect logistics contractors to have the capacity to maintain good visibility of inventory. Timely updates regarding the completed or ongoing tasks throughout the logistical process are essential. Based on this understanding, the successful 3PL needs to be able to provide detailed information on a number of issues to LI regarding the operations being undertaken. Proper communication remains one of the cornerstones of any successful logistical process (Darko & Vlachos, 2022). The involved 3PL needs to ensure that the specific company is aware of the operations being undertaken since they significantly impact overall performance and the satisfaction of the final customers.
Operational Concerns and Ongoing Updates
The first kind of information the logistics managers at LI would expect from the recruited 3PL is anything that is of great concern regarding the ongoing operation. For instance, some of the leaders at the company could be concerned about the specific location of a given pallet in an effort to update the targeted customer.
This kind of information is essential to ensure that the final recipients are involved in the process and capable of planning (Tripathi, 2020). The professionals could be concerned about the collection and delivery time of containers or pallets containing specified products. This information is essential since it will guide the manufacturing process while at the same time aligning it with the demands of other key stakeholders.
Timely Reports on Glitches and Challenges
The second type of information that needs to be provided via timely reports or real-time is any glitch or challenge that could arise through the logistics process. This update will allow the relevant logistics manager to report the same to the targeted distributors or customers (Magento, 2022). The company could rely on the received data to provide additional guidelines or alternatives to support or meet the needs of more clients. This practice is essential to supporting a collaborative approach to addressing challenges and eventually delivering positive results.
Real-Time Visibility of Dispatch Data and Inventory
The third information that the successful 3PL needs to provide is real-time visibility of dispatch data and inventory. Since this is outlined as one of the company’s primary responsibilities, it would be essential to track cargo and be in a position to plan. The collected data will be critical in guiding the other departments involved in the outsourcing and manufacturing of the targeted products. An increase in demand will automatically influence the recorded inventory (Magento, 2022). The company will be in a position to apply this kind of information to improve operations and eventually meet the needs of more customers. These changes will increase the chances of LI being more successful and profitable in the GCC market.
Information on Product Loss, Damage, or Expiry
The fourth type of information expected from the 3PL is any loss, damage, or expiry of products before they are eventually delivered to GCC distributors. The nature of products associated with the company explains why temperatures of 22oC are required for the storage pallets. Any delivery of expired or defective products to different suppliers is a clear indication that the final consumer will be affected negatively (Budler et al., 2021).
The company should provide this kind of information in a timely manner to ensure that proper arrangements are made to reduce mishaps. The ultimate goal should be to meet the needs of the final customers since they have the potential to either support or weaken the image of the final products in the market.
Identification of New Systems and Technologies
Finally, 3PLs are constantly identifying new systems and technologies to streamline their operations while maximizing the services available to the targeted clients. The successful 3PL should be able to update LI should there be any change in procedures and operations. For instance, any improvement or acquisition of superior trucks for road transport means that more suppliers and distributors could be serviced in a shorter time.
This kind of information would be essential for the manufacturing company to make the relevant adjustments that could contribute to improved performance (Magento, 2022). The adoption of an advanced information systems technology could compel the company to improve its infrastructure to streamline communication. Such reports would, therefore, be essential to make it easier for LI to maintain good inventory visibility while ensuring that all outsourced logistical operations are completed seamlessly.
Benefits
LI is currently focusing on the best ways to innovate and deliver high-quality personal care and pharmaceutical products to its clients in the GCC. The company’s operations are limited since it can only operate two temperature-controlled trucks to provide finished goods to key distributors in Muscat and Dubai. Experts at LI have predicted that the current volume requirements might increase significantly within the next five years. This prediction has compelled the organization to consider the importance of contracting a 3PL to get additional storage and be able to improve its transportation efficiency (Budler et al., 2021). Such a move is timely and capable of delivering a number of benefits to the company.
Access to Expertise and Resources for Logistical Goals
The proposed move means that LI will find it easier to access additional experience and resources to support its logistical goals. Most of the 3PLs understand the trends in the market and can complete the much-needed documentation in a timely manner. They have adequate systems intended to refrigerate or store goods before they can be transported to the final distributors.
This achievement means that the company will get a new partner capable of providing timely services that will eventually support the anticipated growth and business objectives (Magento, 2022). The available experience will reduce some of the barriers that many companies encounter while trying to enter a new market or region.
Focus on Core Goals and Enhanced R&D Capabilities
By contracting a third-party firm to complete logistical operations, LI will get adequate time to focus on its primary goals. Specifically, it will utilize its current resources to promote research and development (R&D) initiatives that could eventually result in high-quality products. The leaders at the company will no longer have to deploy their staff and resources on logistical operations (Qureshi, 2022).
Consequently, it will be easier to streamline operations and increase the chances of growing production and eventually improving access to untapped markets in the wider GCC region. This achievement or benefit will make it easier for the organization to increase its competitive advantage and eventually become a leader in the Middle East.
Scalability and Flexibility to Meet Changing Demands
The benefit of scalability will be evident after LI secures the services of a 3PL. Specifically, the leaders at LI will liaise with the service provider to ensure that distribution processes are streamlined and informed by the changing business demands. For instance, any increase in demand would guide the leaders at LI to consider the best ways to improve production.
New incentives will emerge to maximize the use and application of resources that remain underutilized (Baidoo-Baiden, 2022). The process of up-scaling will result in flexibility and eventually ensure that the needs of more stakeholders are met. Such gains mean that the company will be increasing its chances of recording positive gains.
Market Expansion and Growth Opportunities
Being a new player in the GCC market, LI could capitalize on the services of a reputable 3PL to improve growth. Qureshi (2022) indicates these players have the potential to give clients access to new or emerging markets in a timely manner. For instance, they could suggest or find additional suppliers to ensure that more customers are in a position to access the finished products.
The organization will rely on the services of the 3PL to manage investors without necessarily having to incur additional expenses on labor, equipment, technology, or resources. The company will venture into additional markets by applying timely or proper marketing efforts. These gains mean that the chances of recording business growth will increase significantly.
Cost Savings and Improved Supply Chain Efficiency
The ultimate aim of any business function is to maximize the recorded profits while improving the overall experiences of the anticipated customers. The move to get a 3PL will make it easier for LI to realize this objective since it will benefit from increased cost savings. With an interconnected network, a 3PL is capable of improving supply chain processes while lowering operational expenses. The existing knowledge of the sector and the power of exclusive relations mean that positive communication strategies will emerge between distributors and the manufacturer (Baidoo-Baiden, 2022).
The 3PL company will go further to guide the manufacturer in lowering its expenses throughout the supply chain. This realization will make it possible for LI to consider some of the best decisions to ensure that more customers get additional discounts. This achievement means that the organization will be in a position to overcome the challenge of competition and eventually become a leading player in the GCC market.
Elimination of Logistical Infrastructure Costs
The current proposal to partner with a third-party company means that LI will no longer have to budget for logistical infrastructure and equipment. This happens to be the case since the recruited firm will provide the necessary storage space for its finished products, offer transportation, and perform tracking activities (Budler et al., 2021). The available technology is a clear indication that the organization will grow exponentially in the market, attract more customers, and eventually succeed in the GCC market.
Real-Time Information for Strategic Decision-Making
Finally, the 3PL will offer timely information that could be utilized in decision-making processes and streamlining operations. Since most of the data needs to be reported in real-time, LI will consider how to change some of the production procedures, outsourcing efforts, and business activities to ensure that they are in tandem with the demands recorded in the market (Budler et al., 2021). As the company anticipates expanding its operations within the next five years, the idea of contracting a 3PL is timely and capable of ensuring that timely results are eventually recorded. These gains will take the organization closer to its business aims and leave more customers satisfied.
Conclusion and Recommendations
Having identified and partnered with the right 3PL, LI will need to establish a competent team that will work with the contracted 3PL to ensure that all tasks are completed properly. The individuals involved will be keen to ensure that the level of compliance remains high and in tandem with the anticipated goals (Darko & Vlachos, 2022).
This approach would be appropriate to support decision-making processes, expedite problem-solving procedures, and ensure that logistical operations remain seamless. The team will be tasked with ensuring that the selected 3PL meets its obligations while supporting the company’s overall business strategy.
Although the significant issues to consider when selecting the most appropriate 3PL have been outlined, LI should identify a service provider that has the potential to provide the necessary customizations. This strategy needs to be pursued depending on the changing aspects of the business. Baidoo-Baiden (2022) believes that a reputable 3PL should be able to customize its operations in line with the goals of the specific client.
Additionally, changes could be made accordingly since many companies will implement timely transformations depending on the trends recorded in the global market. The use of past feedback and reviews from past clients could be an excellent place to start when looking for the best 3PL.
The financial muscle or strength of a 3PL is usually a strong indicator of a partner that has the potential to support organizational performance. Tripathi (2020) advises logistical managers to ensure that 3PLs have a fair history of financial losses and risks. The move will minimize cases of undelivered promises or negative gains that could affect a business and make it hard to achieve most of the intended goals.
Additionally, LI should consider some of the possible challenges that might occur and introduce proper working arrangements with the 3PL. For instance, the 3PL should be able to maintain the highest level of confidentiality while at the same time supporting the promoted business model (Budler et al., 2021). The company should provide requested information in a timely manner to ensure that the necessary decisions are made. These considerations will increase the chances of success and eventually make it possible for LI to tackle the challenge of competition in the region.
In a nutshell, the decision to partner with a 3PL is reputable since it will support LI as it intends to maximize its operations in the GCC market. Presently, the company is operating two temperature-controlled vehicles to deliver supplies to distributors in Muscat and Dubai. However, such a model is currently limiting the company’s ability to meet the demands of most of its business partners and customers.
The anticipated increase in volumes within the next five years means that additional transportation and shortage would be needed (Baidoo-Baiden, 2022). By recruiting a competent 3PL, chances are high that the company will find it easier to concentrate on core manufacturing areas, access advanced logistical technologies, monitor inventory in real-time, and access more distributors in different GCC countries. This decision will increase the company’s chances of success and eventually make it a profitable player in the Middle East.
References
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Budler, M., Jakšič, M., & Vilfan, T. (2021). Logistics outsourcing in large manufacturing companies: The case of Slovenia and lessons from other countries. Economic and Business Review, 23(3), 170-183. Web.
Darko, E. O., & Vlachos, I. (2022). Creating valuable relationships with third-party logistics (3PL) providers: A multiple-case study. Logistics, 6(2), 38-59. Web.
Mageto, J. (2022). Current and future trends of information technology and sustainability in logistics outsourcing. Sustainability, 14(13), 7641-7667. Web.
Qureshi, M. R. N. M. (2022). A bibliometric analysis of third-party logistics services providers (3PLSP) selection for supply chain strategic advantage. Sustainability, 14, 11836-11860. Web.
Tripathi, S. P. (2020). Perspectives on logistics outsourcing. Journal of Critical Reviews, 7(15), 3785-3795. Web.