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Measuring operational resilience through logistics cost performance in 3PL-managed supply chains: Evidence from COVID-19 and the Kenyan-Dutch floriculture supply chain
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Black swan disruptions and cost minimization appear mutually exclusive in contemporary supply chains (SCs). This challenge is particularly relevant when logistics activities are outsourced to 3PLs, since operational control and disruption exposure shift to the 3PL. This study examines whether structured decision-making can support 3PL operational resilience during disruption while preserving cost competitiveness under stable operating conditions. It develops a two-stage cost optimization model linking fleet routing and air cargo allocation, compares model-based decisions with observed 3PL practice, and evaluates cost performance under information and capacity scenarios. The model is applied to the Kenyan-Dutch floriculture SC using real operational data. The findings show lower costs in both stable and disrupted periods and an absolute cost advantage across all observed weeks, indicating that disruption performance is not achieved at the expense of stable period cost performance. Rather than introducing an additional resilience construct, the study derives indicators of cost deterioration, recovery, and information value from the model’s cost outputs, linking 3PL decision-making and cost performance with resilience during disruption and recovery. The findings suggest that more effective allocation of existing logistics resources and information can strengthen 3PL competitiveness across stable and disrupted conditions without requiring major dedicated resilience investments.
Title: Measuring operational resilience through logistics cost performance in 3PL-managed supply chains: Evidence from COVID-19 and the Kenyan-Dutch floriculture supply chain
Description:
Black swan disruptions and cost minimization appear mutually exclusive in contemporary supply chains (SCs).
This challenge is particularly relevant when logistics activities are outsourced to 3PLs, since operational control and disruption exposure shift to the 3PL.
This study examines whether structured decision-making can support 3PL operational resilience during disruption while preserving cost competitiveness under stable operating conditions.
It develops a two-stage cost optimization model linking fleet routing and air cargo allocation, compares model-based decisions with observed 3PL practice, and evaluates cost performance under information and capacity scenarios.
The model is applied to the Kenyan-Dutch floriculture SC using real operational data.
The findings show lower costs in both stable and disrupted periods and an absolute cost advantage across all observed weeks, indicating that disruption performance is not achieved at the expense of stable period cost performance.
Rather than introducing an additional resilience construct, the study derives indicators of cost deterioration, recovery, and information value from the model’s cost outputs, linking 3PL decision-making and cost performance with resilience during disruption and recovery.
The findings suggest that more effective allocation of existing logistics resources and information can strengthen 3PL competitiveness across stable and disrupted conditions without requiring major dedicated resilience investments.
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