CHAPTER 1 INTRODUCTION

1.1 Research background

With the continuous development of the global market economy, under thebackground of market system being more perfect, of scientific and technologicallevel being rapidly increase, the social division of labor and specialization level iscontinuously strengthened. The THIRD PARTY LOGISTICS has gotten a rapiddevelopment and becomes one of the main subjects of logistics research since the1990’s of the 20th century. After entering the WTO, Chinese logistics market opensthe door to the foreign THIRD PARTY LOGISTICS enterprises, which rush into theChinese market, inject new vitality for the domestic third-party logistics market.These foreign THIRD PARTY LOGISTICS enterprises have some different qualitymanagement operation experience. But due to its short history in the Chinese market,not knowing well about the characteristics of the local market, how to use theadvanced QUALITY MANAGEMENT SYSTEM to be compatible with the currentlogistics status in the Chinese market, how efficiently and practically to carry out aTHIRD PARTY LOGISTICS quality, it takes time for them. The local third-partycompanies are familiar with local market, have a certain network and resources, butthey cannot continue on improving the enterprise quality standardization and servicequality. The THIRD PARTY LOGISTICS companies are lack of the awareness ofquality management and experience, often consider too much on the costs, pay muchattention on the short-term gains, and fail to put enough time, energy and resources inimproving the quality. For the THIRD PARTY LOGISTICS industry, in theincreasingly fierce competition, how to control well in the management of qualitymanagement, how to improve the level of service became the key to improveenterprise core competitiveness. 

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1.2 Research significance

As the global economic integration and information sharing network channels toexpand and transparent, more and more enterprises turn their attention to the totalcost in the process of the optimal strategy of enterprise management, from theinternal independent cost reduction of each function. The owner enterprises wouldsubcontract non-core businesses to a third party professional service providers, inorder to make themselves concentrate power itself into the construction of the corebusiness. The THIRD PARTY LOGISTICS as a logistics company takes on theneeds of various links of the logistics business. The logistics distribution business isone of the most fundamental function sectors in the THIRD PARTY LOGISTICS. Atthe same time, through shipping by the transport team, goods is ultimately deliveredto the merchant or terminal customers, the quality of distribution operationmanagement level not only directly affects the total logistics cost, but also directlyaffects the customer's perception of quality and evaluation on enterprise goods, andtherefore it’s a necessity for a enterprise to improve the competitiveness bycontrolling the quality of distribution business. In order to enhance corecompetitiveness, improve the comprehensive strength and service level, based onconsiderations of cost and resource integration professional degrees, the THIRDPARTY LOGISTICS enterprises need to introduce the quality management system,improve the level of quality control, which become a key issue for the THIRDPARTY LOGISTICS enterprises.

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CHAPTER 2 LITERATURE REVIEW

2.1 Theories of the third party logistics

2.1.1 Third party logistics

The Third-Party Logistics (short as 3PL) originated from management sciences out-sourcing. It means the function and service dynamically allocated by the enterprisesfor their own and other companies, the usage of external resources applicable into theinternal production service, introducing out-sourcing into the logistics managementfield. That’s how THIRD PARTY LOGISTICS concept was formed. Third partylogistics is a kind of logistics operation and management for all-way control oflogistics management, in which the enterprises, who focus on the production andoperation of enterprise management business, entrust in the form of contract theirown Logistics activities to professional Logistics service enterprise, meanwhile keepclose contact with the logistics enterprises through data system. They will normallysign a logistics service contract with the shippers for a certain period of time, andhence the THIRD PARTY LOGISTICS has been called as "contract Logistics". TheTHIRD PARTY LOGISTICS, different from "the first party" shipper and “the secondparty” consignee delivery, carry out a new form of Logistics enterprise Logisticsactivities. It provide the customers with the logistics agency services of serialization,personalization and information, which is bound by the contract, bases on an alliance,without involving with goods nor participates in goods trading. The most commonmode of 3PL services includes design, warehousing, transportation, distribution,information management, statements, forwarder, customs clearance, and so on. Therelationship among 3PL, 1PL and 2PL as shown in figure

2-1 The relationship among 3PL, 1PL and 2PL

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2.2 Distribution related concepts

2.2.1 Distribution concept

Developed countries, the understanding of the distribution is not entirely consistent,there are differences in the expression .It’s a very important consensus thatdistribution is delivery, though developed countries haven’t reached to a completeconsistence on the understanding of the distribution. The United States emphasize ongoods delivered, while Japan industrial standard JIS explanation for distribution is"send goods from logistics node to consignee". It makes all clear with its meaning that the principal part of the distribution is delivery. The developed countries don’tstress on “send”, but on “delivered” with the reason is that in a buyer's market “send"is an economic behavior for “delivered”, is that the necessity of competition andimproving their economic benefit. It is the optimal form in competition, withoutbeing emphasized.“ Logistics Manual” of Japan 1991 described as follows: “to thecontrary of the transportation between urban stronghold and logistics nodes, thetransportation for domestic demand by the city and regional range is calleddistribution." It’s clear that delivery limited within an area (city) is an importantunderstanding of distribution logistics by Japanese. Speaking from the nature ofdistribution, it’s a form of transportation, further mentioned in this book as: "spacemoving from factory to the distribution center space is called" transportation ", thegoods moving from distribution centers to customers is called "distribution". InTHIRD PARTY LOGISTICS links, the distribution being a very important part, is akind of short, small batch, high frequency form of transportation. It targets at servingand meeting customer requirements as the priority. If from the perspective oftransport, it is a supplement and improvement for trunk line transportation,transportation and regional transportation, mainly by motor transport, rail vehicletransport under urban rail freight conditions, railway transportation used for acrossthe city region, or ship transportation in the waters of the river. During the process ofdistribution, the goods can be directly sent to the customer from factory productionsuch as warehouse, wholesalers, and distributors or transferred by the distributioncenter, logistics center to the customer. Distribution belongs to the terminaltransportation and regional transportation. It distinguishes from general transportationat short distance, small size and high quota, like generally the vehicle transportation.

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CHAPTER 3 CASE DESCRIPTION.............................22

3.1 Background introduce of company X..................... 22

3.2 The introduction of company X’s quality management system......................23

CHAPTER 4 CASES ANALYSIS.................27

4.1 SWOT analysis on company X’s distribution competitiveness......................27

4.2 Existing problems in company X’s distribution quality management............29

CHAPTER 5 IMPROVEMENT IN QUALITY MANAGEMENT SYSTEM OFCOMPANY X DISTRIBUTION BUSINESS..................35

5.1 Establishment of quality management system on company X’s distributionbusiness based on ISO9000..................35

5.2 The standardization in distribution business................45

CHAPTER 5 IMPROVEMENT IN QUALITY MANAGEMENTSYSTEM OF COMPANY X DISTRIBUTION BUSINESS

5.1 Establishment of quality management system on company X’s distributionbusiness based on ISO9000

Company X established the quality system for its distribution business according tothe requirements of ISO9000 to improve customer satisfaction. According to theeight principles of ISO9000, we have 14 key elements to adapt to the X company,they are (1) the customer management;(2) the policy, goals and manual;(3)resourcesand training; (4)standardization process; (5) document management; (6)responsibility and authority; (7) internal communication; (8) infrastructure andworking environment; (9) supplier management; (10)corrective and preventiveactions; (11) the internal evaluation; (12) performance management; (13)management review; (14) continuous improvement.

In application of the Deming cycle theory, the 14 key factors of company X alsoconstitute a PDCA cycle to achieve continuous improvement. The relationshipamong these 14 processes as shown in figure 5-1:

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CHAPTER 6 CONCLUSION AND EXPECTATION

6.1 Research conclusion

With the rapid development of social economy, the public requirement from differentindustries becomes higher and higher to the logistics service. Non-standard, in-comprehensive, untimely already deeply affect the core competitiveness of thelogistics company. In order to enhance their core competitiveness, to enhance thelevel of profit and management level, Logistics Company should pay more attentionto and invest more into the company's quality management, which becomes aneffective and feasible way and is accepted by more and more logistics companies.Logistics quality management, by formulating scientific and rational unified standard,is of the whole object of the implementation of logistics activities, of the wholeprocess of participation and the implementation of quality management control. It canshorten logistics distribution time, improve the quality of distribution, and enhancethe satisfaction from upstream and downstream enterprises and customers.

Through the study on the quality management knowledge and theory, combining withthe third party company X as the research object, the writer carries out a series ofdesign, implementation and checking on its standard quality management system.Through the establishment and running of the quality management system, andthrough the activities for the internal quality management, logistics companies canrender full assurance for all quality requirements in the logistics links, improveservice levels and customer satisfaction. Through the quality certification ofenterprises, the companies can prove their own qualification and professionals infront of the customers and can provide a high level of logistics service ability, so thatthe enterprises will stand in an advantageous position in the intense marketcompetition.

reference(omitted)