After the IMF crisis in late 1997, domestic corporations have started corporate restructuring, in order to reduce costs and reinforce core capabilities. At the same time, they are promoting business efficiency and are attempting at out-sourcing the lo...
After the IMF crisis in late 1997, domestic corporations have started corporate restructuring, in order to reduce costs and reinforce core capabilities. At the same time, they are promoting business efficiency and are attempting at out-sourcing the logistic process of overlapping logistic that are unnecessary within the corporation to exterior companies specializing in logistic. Although out-sourcing is becoming popular, the domestic third party logistic industries are small and are in lack of professional operations. In addition, the owner corporations are concerned about the revelation of corporate information and the decline of control, which may make it difficult for mutual relationships to be formed. The few companies that actively offer logistic services are going no further than subsidiaries of large companies, main job of which is simply commissioning the logistic process of the companies within the group.
This research is advanced with this problem in mind and aims to propose the future of third party logistic industries to promote the development of the domestic logistic industry. For this purpose, this paper examines the possibility of introducing domestic third party logistic industries in circumstances that as the methods of private logistic are confronted with their limitations, the excessive cost of logistic acts as the greatest weakness in gaining their competitiveness. Besides these, This suggests a strategy for freight and logistic enterprises and a policy for activating the third party logistic industry.
The main contents of the research is that third party logistic, which has developed due to the rescind and relief of freight regulations and the introduction of market competitiveness within the industry, "takes the role of out-sourcing a part or the whole process of a company's logistic, shares information and strategic alliances under a long term contract in order to increase the efficiency of logistic which is the common aim of the owner company and the logistic service supplier". The owner company benefits from the third party logistic, not only by reducing the costs and improving the services, but also by the access to specialized information on logistic, improvement of customer service and focusing on core businesses with in the company. These factors allow the company to Increase its competency and enables it to continuously have the position of advantage over other groups within the industry.
In order to keep the position of advantage in a global economy where competition takes place not only among individual companies but also suppliers, an effective logistic system has to be established. Therefore the owner companies and third party logistic enterprises need to form long term partnerships and develop strategic alliances. In order to maintain such a successful alliance, and establish an efficient supply chain, third party logistic enterprises need to be selected through a basis, of which the criteria are specialized knowledge and experience on logistic services, stability, a substructure for existing business affairs and the management of partnerships, concerns on quality, consideration for partners, flexibility, exchange, etc.
However, the domestic industry for logistic has many problems such as the insufficiency of the infrastructure compared to the scale of the economy, the small scale of freight and specialized logistic which compose the third party logistic enterprises, the inefficiency of facilities and equipment for logistic, the immaturity of the market as corporations became aware of the importance of logistic only in the early 1990's, the lack of interconnection among government departments which superintend logistic policies.
The cases of domestic market leaders of the third party logistic industry have been divided into freight enterprises and specialized logistic enterprises and studied. It shows that it is urgent to differentiate among logistic services and form strategic alliances among logistic enterprises with both the same sort and different sorts of enterprises based on customer satisfaction.
This research emphasizes the importance of third party logistic in enhancing the competency of domestic companies and introducing a flexible, secure logistic system under a fast changing economy. It explains specifically the necessary conditions and plans for future development of the companies which are adopting third party logistic so that it may perform business successfully. It also suggests ways of support for the government to create an environment in which logistic can be activated. The main topic of the study is that the government, owner companies and third party logistic industries must collaborate interactively for third party logistic to be established.