How GPS Technology Has Evolved the Third-Party Logistics Industry

The third-party logistics industry is undergoing a rapid transition due to the advances in information and communication technologies.

Advancement in information technologies has brought substantial benefits to logistics service providers, specifically third-party logistics (3PL) companies. The development and application of these technologies such as global positioning system (GPS) are especially important and helpful in transportation and logistics activities that are integral components in any supply chain system.

In this article, we discuss the application of GPS-based information technologies to optimize operations of companies providing third-party logistics service. We discuss how these technologies help to enhance the effective and efficient management of their businesses and analyze the interaction of GPS implementation and several key characteristics of the logistic distribution context.

Because of the wide range of business activities involved in the transportation process, logistics related costs account for a quite substantial share of the total costs for any company. In the past decade, other technologies such as enterprise resource planning and electronic data interchange systems substantially improved the efficiency of supply chain management. In this decade, the emergence of GPS improves logistics operation efficiency.

In recent years, GPS has been used in vehicles of logistics service providers. GPS is used for obtaining information with respect to the position, speed, and travel direction of vehicles. In addition, there are concepts and techniques to combine GIS, GPS, and other digital communication technologies to locate the position and velocity of vehicles.

The emphasis of the concept is on the importance of the connection with the central monitoring system. There have also been studies on the application of GIS and OR techniques in the problems of technician-dispatching and home deliveries and parcel delivery. in Korea. GPS is also important for geographic data collection, global positioning system based addressing, vehicle routing, and resource discovery.

GPS and related new computer systems and information technology have a huge impact on logistics distributions. We need to understand GPS usage and have a deeper understanding about the benefits and values generated by these technologies in logistic operations and provide analysis of why these benefits exist. For instance, improved just-in-time service, optimized delivery schedules, and routes are made possible by these technologies, real-time monitoring, and data transfer are obtained between dispatchers and drivers helps improve supply chain management.

Moreover, these advantages can also be extended and enjoyed by their costumers such that the entire supply chain operations can be optimized. Studies reveal important and critical issues during the application process of these new technologies. While some of the issues are inherent and closely related with the further development of these new technologies, others need stronger collaboration and support from logistics management partners and from other important players in the business.

Results confirm the potential of related technologies of GPS for enhancing operating efficiency and productivity, improving communication and relationship building, and facilitating collaboration and strategic planning of a firm and its supply chain. The results have to be interpreted cautiously and need to be validated with further extensive studies. Continued large-scale research should be planned and conducted to further explore broad range of business sectors.