A NEW WAVE(3PL

)
By:KUNAL JHA LAKSHYA SOOD

India .Third Party Logistics .

” -.Third Party Logistics  “Third-party Logistics is simply the use of an outside company to perform all or part of the firm’s materials management and product distribution function. more mutually beneficial relationship” -. has more customized offerings. compared with the basic services. encompasses a broad number of service functions and is characterized by a long-term.Simchi-Levi (2000)  “A relationship between a shipper and third party which.Murphy & Poist (1998) .

Characteristics of 3PL      Perform outsourced logistics activities Process management / Multiple activities More customized services Mutually beneficial and risk-sharing relationship Long-term commitments (1~ 3 years) .

Why is it needed?  Advantages o o o o Cost reduction Focus on core competency Improved efficiency. service and flexibility Industry-specific application – “build-to-order” systems and e-merchants  Disadvantages o o Loss of control Impact on in-house workforce .

Types of 3PL Providers      Transportation-Based Warehouse/Distribution-Based Forwarder-Based Financial-Based Information-Based .

A practical overview • • • • 1 billing cycle A cycle completes in 15 days 50% in advance Forward the acknowledgement to the transporter .

Budget Allocation • According to Delhi Transportation Corporation:• Unskilled Labour = 247 • Semiskilled Labour = 273 • Skilled Labour = 301 .

5 lakh (CNG) Total cost = 2*1.5 = 3 Lakh No of labour = 4 No of working days = 300 Cost of 1 labour = 300*247=75k (app) Cost of 4 labour = 3 lakh .Budget Allocation • • • • • • • • Available Budget = 10 lakh No of truck = 2 Cost of 1 Truck = 1.

Budget Allocation • Remaining Amount = 4 lakh • Risk covering amount = 3 lakh • Maintenance charge = 1 lakh .

Thank you .