| For a variety of reasons, the outsourcing of logistics functions to third party logistics providers (3PLs) has emerged as a powerful alternative to managing traditional internal logistical operations. In fact, outsourcing logistics functions is one of the prevailing strategies that enhance a company's competitiveness. Given this business shift in the private sector, the purpose of this study was to determine whether the relationships between a government agency and their third party logistics provider share some of the same indicators of a strategic relationship common among corporate strategic alliances. Specifically, by looking at both the benefits and detriments of strategic alliances, this investigation was designed to find out if the Department of Defense had shifted the way it dealt with its logistics contractor in a similar manner to the shift that has occurred in the corporate world. This study used a qualitative approach and critical practicality to assess the dynamics of this relationship. Additionally, this study employed instruments used in previous studies administered to senior executives and students attending advance training in logistics operations and concepts. As detailed herein, the findings indicate three essential components for a successful 3PL relationship in the government sector: a high level of trust, transparent financial arrangements, and ongoing information sharing. The results of this study are expected to offer guidance on how government agencies can be more effective in dealing with their private sector providers. The findings presented herein may also provide the U.S. government with information that could help it replicate a legal model of the supplier-relationship management model that is so widely used in the private sector. |
