3PL selection criteria and their correlations of external environmental factors-an empirical study of Taiwan IC industry

External environment strongly influences the strategy choice of an enterprise. Due to the fierce global competition, an enterprise determines to focus its main resource on core competence and outsources its logistic operation to a dedicated third-party logistics (3PL) supplier is a strategic decision to reduce the operation cost and in the meantime to improve the logistic service quality. The prior research showed that the decision of logistics outsourcing had been affected by external environmental factors, i.e., dynamism, hostility and heterogeneity. The IC industry in Taiwan has a unique vertically disintegrated structure that consists of various firms specializing in three segmentations of the value chain, i.e., upstream IC design, midstream IC manufacturing and downstream IC assembly and final testing. To achieve the logistics efficiency along the IC supply chain, the three segmentations have collaborated with 3PLs closely to meet the relentless market demand. This research aims to identify the different 3PL selection criteria of the three major segmentations of IC industry and further explore to what extent external environment affects the three segmentations when considering 3PL selection criteria.