An Analysis of Third Party Logistics and Implications for USAF Logistics

Abstract : This study was undertaken to determine the current trends in third party logistics. The Air Force Material Command Lean Logistics office sought information for improving USAF logistics support. The purposes of this study were to report results of third party logistics use, determine characteristics of successful third party relationships, and to discuss the implications for USAF logistics managers. A qualitative research methodology was chosen using multiple case studies. Logistics managers from eight third party users and ten third party providers were administered an extensive research protocol. The results revealed an industry which is growing rapidly. While the momentum for third party logistics use was strong, most managers cautioned for the use of an incremental approach to using third party logistics. This permits an easier transition for the using organization and leaves the option open to return logistics in-house if the provider is lacking. The majority of third party providers in this study were not interested in DoD business. Providers indicated that the perceived difficulty of competing, administering, and renewing a DoD contract was not worth the income generated. This may be restricting DoD's accessability to firms providing the best service and/or a lower cost.