Component-Based Software Development Framework for 3rd Party Logistics Business ()
This paper suggests a component-based software development framework for 3rd party logistics (3PL) business. This framework integrates two engineering methodologies in order to identify the most reusable software components that can be used in several types of 3PL business models. Unified Modeling Language (UML) is used to design lower-level software components and Design and Engineering Methodology for Organization (DEMO), one of the business engineering methodologies based on the communication theory, is used to identify core business processes for 3PL business models. By using the methodologies, we develop a 3PL management solution by applying the framework into a custom-to-custom (C2C) type of 3PL business model, specifically the door-to-door (D2D) service.
1. Introduction
Intensified business competition has led industries to outsource almost all of business functions except their core competencies. Logistics function is one of the most outsourced one since this function requires tremendous physical investment and considered as non-value added function. Much has been written in recent years about outsourcing logistics activities. There have been various terms used to describe this phenomenon such as logistics alliance, operational alliances in logistics, contract logistics, contract distribution and third party logistics. However, third party logistics (3PL) has been the term more widely used in recent times. Given the growing importance of logistics outsourcing, the logistics service providers (LSP’s) have appeared and specialized their services through differentiation, with the scope of services encompassing a variety of options ranging from limited services (for example transportation) to broad ones covering entire supply chain.
Leading LSP’s have developed their own logistics management solution themselves and use it on their businesses, while smalland medium-sized LSP’s in general buy and use commercial logistics management solutions from professional software vendors for better customer service. Since LSP’s provide several types of logistics services to business and/or individual customers, the logistics management solutions should have functionalities to support the services. Generally, 3PL services (in other words 3PL business models) can be classified into three types according to entities involved in the logistics services. Business-to-business (B2B) type of 3PL services are those of services provided by LSP’s for logistics requirements between two business customers. On the other hand, B2C-type 3PL services are performed for logistics requirements between business customer and individual customer (end consumer). Finally, there exist C2C-type 3PL services between individual customers. Although there are several types of 3PL business models provided by LSP’s, these models can be supported with a few common business processes. For example, requests for logistics service and acknowledgements of service completion are always needed and performed by LSP’s regardless of service types. As a result, we can develop logistics management solutions more effectively and efficiently if we identify the common business processes and we develop software components for the identified business processes since the software components can be reused for several types of services that are performed by doing the common business processes.
In this paper, we suggest a component-based software development framework for 3rd party logistics (3PL) business. This framework integrates two engineering methodologies in order to identify the most reusable software components that can be used in several types of 3PL business models. UML (Unified Modeling Language), known as de facto standard for object-oriented software design, is used to design lower-level software components. DEMO (Design and Engineering Methodology for Organization), one of the business engineering methodologies based on the communication theory [1,2], is used to identify core business processes for 3PL business models. We develop a 3PL management solution by applying the framework into a C2C type of 3PL business model, specifically the door-to-door (D2D) service.
2. 3rd Party Logistics Management Solution Structure
3rd Party Logistics Management Solution is the software needed by 3PL for planning, executing, and controlling the logistics activities. The solution can be categorized by the levels of component granularity within the business component approach. The categories are addressed in order, from finest-grained to most coarse-grained. They are as follows:
1) Distributed component: It has a welldefined runtime interfaces and a runtime network address. Also, it has a specific internal structure into which those object-oriented programming language classes fit or plug.
2) Business component: A component that implements a single autonomous business concept, vendor as an example. It usually consists of one or more distributed components that together address the various aspects of distribution required by the business component.
3) System-level component: A group of business components that cooperate to deliver the cohesive set of functionality required by a specific business need. When a business component system is encapsulated by being provided with clean interfaces designed so that the system as a whole can be treated as a black box, then it becomes a component in its own right: for example, as a vendor management system [3].
Figure 1 shows the relationship between the three different level components. We propose the development process of the logistics management solution component in the next section.