Does the outsourcing of logistics services keep its promise of increased efficiency? The case of Colgate- Palmolive, Greece.

Abstract

The aim of this paper is to evaluate the efficiency of third party logistics (3PL) and the importance of outsourcing logistics services from the client’s perspective. This study identifies the strengths and weaknesses of the third-party logistics industry from the perspectives of customers and examines the current views held by executives. Specifically, the research focuses on current practices related to the extent of use, predictive value outsourcing and performance measures system of Colgate-Palmolive Company in Greece. The research examines the efficiency of the logistics service providers, and its impact on the overall client performance, evaluated through interviews with the 3PL Coordinator, the Logistics Manager and the Manufacturing Director. The key findings of the work are that logistics outsourcing takes responsibility for non-core business functions, brings reductions in stocks and costs as well as order-to-delivery lead-time, accelerates capital turnover and capitalizes on synergies to achieve efficiency and effectiveness. Overall, its contribution is evaluated by the client as satisfactory and of medium significance, with room for improvements. It was concluded that the 3PL clients are pleased with 3PL providers and most probably the cooperation between the two parts will progress based on the new productive agreements in the future.