Advantages of 3PLs as healthcare supply chain orchestrators

Abstract

Given the expansion of the COVID-19 cases and the average infection rate globally, constructing a robust healthcare supply chain system for the crisis is highly crucial. The third-party logistics providers (3PLs), who can match the market demand with reliable manufacturers worldwide, have emerged as orchestrators. In addition to the basic transportation and storage services, some 3PLs can also provide procurement assistance to relatively small retailers. To illustrate the value of the above-mentioned business model, we build a game-theoretic model to capture participants’ optimal strategy in a healthcare supply chain consisting of a manufacturer, a 3PL provider, and a retailer. We also investigate the conditions where the performance in this business model outperforms the traditional model. It is concluded that the 3PL’s positive effect appears when the decentralized supply chain is characterized by high logistics outsourcing costs and high-level price sensitivity. We further design an incentive mechanism that can coordinate the supply chain. Finally, a series of numerical experiments are carried out to demonstrate the effectiveness of our model.

Supply Chain Logistics and Business Ecosystems Needed for the Development of Natural Vaccines with Novel, Safer, and Noninvasive Delivery Mechanisms

“…It is quite common to have third-party logistics (3PL) or fourth-party logistics (4PL) companies handle part or all of the packaging and distribution supply chain. These logistics providers are often well established and trusted in their industry and can offer considerable savings over in-house distribution [53]. Writing an effective and flexible long-term contract could offer an array of synergies and pave the way for a mutually beneficial sustainable partnership.…”

Hospital Supply Chain Management: Cross-Disciplinarity Opportunities in the Post-Pandemic Era and Research Agenda

“…According to the research analysis, most articles address aspects related to the integration of the health SC (28%) since coordinating its internal and external links is challenging. Among these papers, the following topics can be identified: coordination mechanisms (Handfield et al, 2022;Zhang et al, 2022), collaboration strategies (Francis, 2020;Friday et al, 2021), group purchasing , 2022b, 2022a, integrating factors influencing chain performance (Betcheva et al, 2021;Lal et al, 2022;Nartey et al, 2022;, application of game theory (Bian et al, 2021), risk management across the different links , and activities such as government regulation, government support, and tax cuts (Lau et al, 2022).…”

The cash flows in push and pull supply chains under supply disruptions

“…That is, third‐party logistics companies purchase goods from manufacturers, obtain payment delay arrangement, and then allow buyers to delay the payment of products and transportation fees, which can alleviate the buyer's high capital opportunity cost. Bian et al (2021) demonstrate the positive role of third‐party logistics companies as orchestrators in the health‐care supply chain.…”