Towards a Pro-Silience Framework: A Literature Review on Quantitative Modelling of Resilient 3PL Supply Chain Network Designs

Abstract

The increasingly dynamic and volatile market environment has elevated the importance of handling operational risks in supply chain networks. Also, black swan risks are constantly evolving and can strike from almost anywhere, including natural disaster, cyber risk, or viruses. As more companies are outsourcing their logistics to third-party logistics (3PL), at the same time, supply chain risks and uncertainties are also shifted to 3PLs. A 3PL’s supply chain network capability to assure continuity can be expressed in terms of resilience, i.e., the ability of sensing and responding to disturbances or threats. Operations research/management science (OR/MS) methods have been widely applied in supply chain management. The objective of this paper is to look into research regarding the development of resilient 3PL supply chain network designs through the utilization of OR/MS methods. After extensive literature review, a so called pro-silience framework is developed aiming at improving resilience from a 3PL perspective maintaining or increasing its competitive advantage during and after major disruptions, yet also maintain competitiveness under normal operating conditions. Additionally, the framework offers insights into topics for future research.

COVID-19 and the pursuit of supply chain resilience: reactions and “lessons learned” from logistics service providers (LSPs)

“…With companies focusing more on their core competencies, the outsourcing to LSPs gives shippers exactly the carrier capacity they need and provides flexibility in the supply chain (Wilson, 2020). The on-demand capacity, flexibility and innovations (Grawe, 2009) put LSPs in a strategically crucial position for a company's daily operations and should also help companies to mitigate negative effects arising from an emergency situation such as a supply chain disruption (Gkanatsas and Krikke, 2020;Lam and Dai, 2015;Liu and Lee, 2018). In former crises such as the Icelandic volcano eruption, for example, the LSP DHL were able to reroute flights to Southern Europe and immediately shifted shipments onto trucks and trains to minimize their customers' losses (König and Spinler, 2016).…”

“…As a supply chain can be understood as a network of organizations mutually and co-operatively working to manage the flow of materials and information from suppliers to end users (Lambert, 2008;Christopher, 2011;Lee, 2002), it should be stressed that global supply chains and the associated complex material flows predominately rely on logistics infrastructure (mainly transport and warehouse services) provided by logistics service providers (LSPs). LSPs play and have played a crucial role in the past decades, as companies increasingly focus on their core competencies and have outsourced their logistics functions for transport and warehousing efficiency, flexibility and capacity purposes (Gkanatsas and Krikke, 2020;König and Spinler, 2016;Lam and Dai, 2015;Liu and Lee, 2018;Wilson, 2020). A 2019 LSP study (Infosys, 2019) revealed that 53% of shippers' transportation and 34% of warehousing operations expenditure is related to logistics outsourcing, with supply chain consultancy Gartner (2019) expecting further budget increases for logistics outsourcing in the upcoming years.…”

Assessment of risks associated with third-party logistics in restaurant supply chain

“…Whereas, Wang et al (2019) adopted a mean−standard deviation objective function to reflect different risk preferences that a 3PL firm prefers. Gkanatsas and Krikke (2020) contribute toward the development of a resilient 3PL supply chain network. Chu et al (2020) examine whether and when guanxi – an effective relationship management approach in China – is vital for 3PL suppliers as a strategic option to manage environmental reliance.…”

Covid-19 Pandemic: Early Implications for North European Manufacturing and Logistics

“…The virus has exposed weaknesses in global supply chains, originating from the lack of diversification of suppliers, extensive just-in-time strategies which have diminished safety stocks, and inadequate supply chain-wide transparency [24]. Hence, contemporary supply chain scholars highlight the importance of resilience in modern supply chains (e.g., [25,26]). In the latest case studies, suspending production during Covid-19 was an option used as demand declined in a harsh manner, and there were difficulties in the global component supply [2].…”