Factors affecting the selection of fourth party logistics provider in the automotive and consumer product industry

Abstract

There are 4 objectives for this research which are 1) To evaluate the most important factors considered when selecting 4PL service 2) To compare all factors in selecting 4PL providers between automotive and consumer product industry 3) To identify the major benefits that customer expected from using a 4PL provider and 4) To provide the obstacles that could encounter companies when they consider using the 4PL provider. The methodologies for this research are descriptive analysis and hypothesis test (T- Test) by using primary sources from 93 copies of questionnaire survey and depth interview from 6 professionals in logistics and supply chain area. According to the research result, the researcher found are 1) The most important factors in selecting 4PL provider are supply chain integration, focusing on core competency and using multiple 3PL in the same time 2) There are differences in selecting 4PL providers between automotive and consumer product industry. Automotive industry concerned more in the need of supply chain integration, focusing on core competency while consumer product industry has focused more in customers’ supply chain demands exceeding its capability to deliver. 3) The customer’s expected benefits are cost and efficiency improvement 4) The obstacles in using 4PL provider are the lack of management confidence in an outside party to deliver the same high level service that company employees provided and loss of control to an outside party.