Inbound Logistics

By PRATICK GAYEN.

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Presentation Plan
The production planning process  The procurement process  Outsourcing of logistical activities  Third Party Logistics providers (3PL’S)  Partnership agreements

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Sub-contracting and Outsourcing

Sub-contracting:
 Activities

that are too complex or that require special competencies  Activities that are outside the field of competencies of our enterprise (example construction and aerospace industry)

Outsourcing:
 Delegate
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to others activities that we were doing ourselves previously
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Outsourcing of logistical services to «3PL’s»
To delegate to another organization part or all of logistical activities  These activities include:
  Transportation  Warehousing  Order

processing  Inventory management  Logistics information systems
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Some of the major 3PL’s
       

Ryder Tibbett & Britten Circle Schneider Bax Global Exel GATX Geodis

       

TNT Logistics Hunt Logistics UPS SCS DSC Caliber Menlo USCO FedEx
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3PL: Some examples
     

Whirlpool Motorola Proctor & Gamble Wal-Mart (Can) Domtar (Can) Goodyear

Ryder Dedicated UPS SCS Exel Logistics SCM (T & B) Groupe Robert CAT

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Reasons for using 3PL’s?
Re d u c e c o sts F o c u s o n c ritic a l a c tiv itie s Im p ro v e o p e ra tio n a l effic ie n c y F lex ib ility Ac q u ire e x p e rtis e C u s to m e r se rv ic e

%

0

20

40

60

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3PL’s: Services offered
Transportation Warehousing Consolidation Consultation Carrier selection Packaging and labelling Information systems Tariffs negotiation Fleet management Reverse logistics

%

0

20

40

60

80

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Source: CLM Annual Conference, 1999.

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Partnership - a definition

A partnership is a customized business relation based on mutual trust, openness, and the sharing of risks and benefits. Its objective is to procure a competitive advantage resulting from improved performance compared to what partners could have obtained individually.

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Partnership Life Cycle
Having a vision  Searching for a partner  Negotiating an agreement  Managing the relationship

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Having a vision and searching for a partner

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Forming a partnership
Reasons leading to a partnership Decision to engage in a partnership Factors facilitating partnerships

Shared activities and processes Partnership results
Reevaluation
Source: Lambert, D.M., M.A. Emmelhainz et J.T. Gardner, «Developping and 12 Implementing Supply Chain Partenership», IJLM, vol. 7, no 2, 1996.
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Reasons leading to a partnership
External factors:
•Consumer requirements •Logistical excellence / complementary •Information technologies and systems •Complexity and globalization of markets

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Reasons leading to a partnership
Internal factors:
• • • • • Minimizing costs (ex. transportation) Increase speed and reduce cycle time Improve service/product quality Increase customer satisfaction Better utilization of assets

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Partnership - advantages
Reducing the number of suppliers  Collaborative planning  Risk sharing  Continuous improvement  Acquiring an expertise  Requiring less resources and capital  Increased flexibility

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Partnership - disadvantages
Difficult to select a partner  Loss of direct control over outsourced activities  Performance evaluation may be difficult  Risk of logistical dependency  Internal resistance to change

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Facilitating factors

    

Compatibility of organizations in terms of culture and conduct (individuals) Similar management techniques and practices Readiness to share with partner Complementary needs and competencies Symmetry There must be a common interest!

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Activities supporting the partnership (cont’d)
Mutual trust and engagement  Sharing risks and benefits  Investments
  Human  Material  Financial

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Conditions for a successful partnership
 

A complex and gradual approach Trust between partners Sociopsychological proximity Dedicated resources

  

Exchange of « rich » information Shared innovation Firm engagement Common learning process

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Conclusion
 Partnership

arrangements have to be adapted to the particular situation and specific needs of the partners  Successful partnerships require time and energy

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