The Logistics Cost of Two Distribution Patterns: A Case Study

Abstract

It is a new approach to obtain the time-based competitive advantage for enterprises through the third party logistics (TPL) providing distribution service. But a more important question that has to be considered is that the pattern of distributing by TPL whether will increase the logistics cost. A comparison of logistics costs of TPL agential distribution pattern and self-operation distribution pattern is presented in this case study. The study results showed that TPL agential distribution can reduce the logistics cost as well as form time-based competitive advantage; three parts of logistics costs are all affected and decreased; furthermore, there is a trend of cutting down both the number of warehouses and warehouse's managers after the TPL agential distribution pattern is brought into effect