3PL OUTSOURCING ‘A SOLUTION’ TO ENHANCE PERFORMANCE AND TO BUILD LONG-TERM RELATIONSHIP

Abstract

Purp°se- Main a>m of this study was to evaluate the impact of 3PL outsourcing of non-core activities of the business on the overall performance of the organizations in Pakistan. The constant changing environment and globalization has imposed increasing pressure on the firms to enhance their performance to stay competitive in any industry. The affluent potential market and its competitiveness in the country stimulated the attention of the researcher to conduct this study. Methodology/sample- In this explanatory research, the predominated data was collected through primary source of data collection. The study involved use of questionnaires filled by 39 respondents of the user of 3PL services and having good knowledge of this emerging field. The respondent individuals belonged to different job positions, organizations and areas of expertise. To analyze the data, Pearson correlation tests were applied, frequency tables were drawn and bar charts were developed for graphical presentation of the data. Data from different journals, articles and annual reports of different organizations of this growing sector of Pakistan was also collected for theoretical frame work of this study. Findings- The analysis and comparative results clearly suggested that 3PL outsourcing of non-core activities not only promises enhanced performance but also helps in building long-term relationships with the customers in Pakistan. The 3 PL industry is in growing stage and has incorporated great potential in it. It has also revealed through findings that comprehensive outsourcing process must be practiced in organizations before outsourcing any business unit. This model would help in evaluation of the performance of the 3PL provider. It was also concluded that higher performance of 3PL provider in turn offer additional benefits like operational flexibility and working in extended geographical locations. Further research areas were also identified like lack of infrastructure available for flourishing this emerging field in our country. Practical Implications- The outcomes of the research might help the corporate decision makers, government policy formulators and other related quarters to understand the impact 3PL outsourcing of non-core business units and its significant relationship with service quality (performance) of the organizations. The organizations can focus on their core competencies by getting rid of these non-core activities which implies huge financial and managerial burden in Pakistan.