Third Party Logistics Providers (3PL

Kyle Sera Amy Irvine Scott Andrew Carrie Schmidt Ryan Lancaster

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What are 3PL’s Why use them Tips for implementation of 3PL’s 4PL’s

Non-leveraged 3PLs use assets belonging solely to the parent firm. Examples: Ryder. UPS Logistics    .Types of 3PL Providers   Transportation Based Services extend beyond transportation to offer a comprehensive set of logistics offerings. Leveraged 3PLs use assets of other firms. FedEx Logistics. Schneider Logistics.

Caterpillar Logistics.Types of 3PL Providers   Warehouse/Distribution Based Many have former warehouse and/or distribution experience. USCO. IBM  . Exel. Examples: DSC Logistics.

Types of 3PL Providers   Forwarder Based Very independent middlemen with forwarder roles. C. Non-asset owners that provide a wide range of logistics services. Hub Group   . Examples: AEI. H. Kuehne & Nagle. Circle. Robinson. Fritz.

Types of 3PL Providers   Financial Based Provide freight payment and auditing. FleetBoston  . Examples: Cass Information Systems. cost accounting and control. booking. tracking. tracing. and managing inventory. and tools for monitoring. CTC. GE Information Services.

Examples: Transplace. electronic markets for transportation and logistics services.Types of 3PL Providers   Information Based Significant growth and development in this category of Internet-based. business-tobusiness. Nistevo  .

Why be good at this? Core competency? .Logistics?    Logistics: Managing the flow of information and goods inbound from suppliers and outbound to customers.

Why Use 3PL’s?  Save time  Don’t need to invest in:    Trucks Training Development  Help expand   New markets International  No roads .

 Narrow your focus   Allows you to focus on your strengths Don’t get spread too thin Can ensure delivery times can help a company run leaner  Reach more customers more effectively   .Why Use Cont.

Management Focus     Furthering your company Consider potential benefits and drawbacks 3pl’s can increase profitability Can you be a 3PL to someone else? .

Tactical Outsourcing: Outsourcing on a long term basis with negotiated contacts and integrated IT systems to facilitate free information flow and create supply chain visibility. .Levels of Outsourcing  Transactional Outsourcing: Based on transactions. 3PL companies become partners in supply chain management and establish transactional transparency.   Strategic Outsourcing: Based on long-term relationships with successful outcomes. with no long term contracts and no bonding between the 3PL and the outsourcing company.

3PL Defined  Can be ambiguous as there are many definitions   Some say “all or a significant part” Some say “at least one part” Businesses that provide one or many of the following logistics services:  Transportation Management  Public/Contract Warehousing  Distribution Management  Freight Consolidation  Best definition is probably a combination:  .

As a Manager… Which 3PL Provider Do I Choose?  Inbound Logistics recognizes top 10    Uses its readers to conduct vote Over 300 companies nominated with 3.H.000+ votes Top 3 this year:    1) UPS Supply Chain Solutions 2) Schneider Logistics 3) C. Robinson .

How is a 3PL Differentiated From a Transportation Provider?     Transportation provider gets product from point A to point B Could be considered a 3PL Just one function of logistics 3PL provider assists in multiple functions .

.Successful Implementation of 3PL  Why you want to select the right provider the first time  Only about 65% of companies believe their provider is doing a “good” job. but we are going to focus on the 5 most important issues.  55% of logistics outsourcing contracts end in 3-5 years  The source had a list of 14 key tips for success.

  Know what your outsourcing strategy is. challenges. As a company you should understand the strengths. opportunities and threats of outsourcing logistics.   Do a comprehensive study Clearly document advantages. 2) Do your homework. It needs to be well thought out and measured against in house solutions and capabilities. costs and benefits. . SWOT analysis. weaknesses.   Document expectations Set down expectations in clear terms and include current costs.Tips for Successful Implementation 1) Have an outsourcing strategy. rather than keeping them in house.

Make a site visit to the 3PL. and talk with its existing customer.    Have an efficient costing system This will help you to understand the costs involved in outsourcing.  3) Measure and review performance   Have a efficient and accurate measurement system. Invite companies in to give a formal presentation without giving requirements. “Are we making money doing this?” . This can help document their strengths and weaknesses. Qualitative measures that focus on effectiveness and quantitative measures that focus on efficient utilization.Tips Continued…   Create a robust selection process.

create a project management team with members from both organizations and review progress vs.  Create mutual trust. 5) Nurture the Relationship  Both Parties must nurture the relationship to make outsourcing successful.Tips Continued… 4) Create an Implementation Strategy   Create a project plan road map Be clear who does what. respect and a sense of integrity. . planned milestones.

capabilities. build and run comprehensive supply chain solutions . serving as an integrator Refinement on the idea of 3PLs 4PLs are not asset based like 3PLs Assembles and manages the resources. and technology of its own organization and other organizations to design.4PL Providers     Manage and direct the activities of multiple 3PLs.

Transways Express 4PL   One stop transport and logistics supplier Work with suppliers and customers .

Questions? .

VK.inboundlogistics. From Massey University.htm .com/glossary.shtml Successful 3PL implementation: Red Prairie: http://www.redprairie.Sources       3PL definition: http://accuracybook. Implementing Third Party gistics.htm Top 10 3PL providers: http://www.about. (2006).htm Sangam.aspx Class lecture slides: About Business and Finance website: Retrieved May 5th.about. 2006.

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