The strategic importance where Sri Lanka is movinginto a manufacturing economy. In getting there it is vital to find theapplicability of using experts in logistics that is called the Third PartyLogistics (3PL). 3PLs can be generally defined as outsourcing a firm’slogistics functions to one or more specialist firms which are known as 3PLproviders. Over the past few decades, the consumer goods industry hasexperienced a shift in supply chain strategy from the push approach directed bymanufacturers and suppliers to pull approach driven by retailers. Also, thereis an increasing emphasis on services, reduced inventory levels and cost oflogistics.
Because of this increasingly demanding environment in managingconsumer goods companies, they are progressively seeking assistance from 3PLs,4PLs, and LLPs. Outsourcing the logistics functions lets the user focus ontheir core competencies, while experts take care of the logistics functions,giving the benefits of increased flexibility, reduced costs and improvedservices. Consequently, identifying potential enhancements in strategic use of3PLs by the FMCG companies is increasingly being a focus point in currentresearch. Having the objectives of providing a collective picture of currentstate of knowledge in this context and setting up a path for future research,this study is based on a comprehensive, systematic review of literaturepublished in relation to the strategic use of 3PLs in FMCG industry. A chain is strong as its weakest-link” Accordingly,to be competitive and to survive in the challenging market, each and everypartner of today’s supply chains have to perform their roles more efficientlyand more effectively than before.
Warehousing is known as the most commonlyoutsourced business function in most of the supply chains. Even though warehouseoutsourcing has gained revolutionary achievements worldwide, the Sri Lankanthird party warehousing industry is still in a developing stage. This paperpresents an empirical research conducted in the third party warehousingindustry in Sri Lanka, focusing more on the warehouse outsourcing practicesrelated to the FMCG industry. The research addresses the research question,”Are there specific facts which are considered by customers when selecting athird party warehouse supplier”. For any business, attracting, satisfying andretaining customers are the key challenges to be competitive in the market.Same as any other business, there are specific facts which attract customers toa warehouse in general. Identifying those particulars correctly will be very helpfulfor service providers to cope with the above challenges successfully.
As an emergingindustry, logistics plays a significant role by providing a helping hand forfirms in achieving competitive edge over rivals. Maximizing profits throughintegrated partnerships is one of the primary objectives of both 3PL providersand their customers when dealing with outsourcing logistics activities. A rapidincrease is visible in the number of companies that outsource their logisticsactivities to 3PL providers. Apparel firms in Sri Lanka have the highestinterest in outsourcing logistics activities compared to other industries.
However, lack of proper identification and fulfilment of customer requirements,which has ultimately resulted a negative perception in the minds of customerstowards their 3PL providers, is a burning issue in this industry. The presentstudy addresses this issue by identifying the factors affecting thesatisfaction of 3PL customers in the apparel industry in Sri Lanka. Primarydata were collected using a semi-structured questionnaire from a random sampleof 56 apparel firms.
Trust, flexibility, effective communication, openness& transparency, effective partnering & collaboration, financialconsiderations, condition fulfilment, and customer relationships, wereconsidered as the factors influencing 3PL customer satisfaction in apparelsector in Sri Lanka. 3PL customer satisfaction was viewed on two dimensions,namely, switching behaviour and customer loyalty. It revealed that all selectedindependent variables have positive significant relationship with customersatisfaction, while flexibility of the 3PL provider was the most significantfactor that influences customer satisfaction.