Professional Documents
Culture Documents
Logistics(3PL)
Content of
Presentation
Introduction to 3PL
Evolution of 3PL
Benefits & Services Provided by
3PL
Types of 3PL
New Technology in 3PL
Relationship Management in 3PL
Environmental Concern in 3PL
CASE STUDY: Selecting a 3PL using
M.C.D.M.
Kuldeep Uttam IIT
Roorkee
Introduction
1PL:These can be the shipper (such as a
manufacturing firm delivering to
customers) or the consignee (such as a
retailer picking up goods from a
supplier). They dictates the origin
(supply) and the destination (demand)
of the goods.
2PL :
3PL:
customers.
These firms facilitate the movement of parts and materials from suppliers
to manufacturers and finished products from manufacturers to
distributors and retailers.
Among the services which they provide are transportation,
warehousing, cross-docking, inventory management, packaging and
freight forwarding.
Evolution of 3PL
The evolution of 3PL market is explained with reference to
three distinct phases
In 1980's many transportation and warehousing firms
developed into 3PL providers( e.g. Excel
Logistics )
Services Provided By
3PL
Benefits of 3PL
173 logistics professionals from manufacturing
and retail companies responded to the survey,
which was conducted by Eye for transport.
Responses were contacted in a targeted email
campaign.
Avoid Labor
Proble
ms
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Freight flow
Manufacturer
Manufacturer
3PL
Distributor
Distributor
Customer
Push
Returns / Recycling
Pull
Kuldeep Uttam IIT
Roorkee
Point-of-sale data
Customer
Total Cost of
Ownership
Advanced
Technologies
RF barcode scanning and RFID
EDI
Integrated interf aces f or wireless
mobile
devices
Web access and real-time data
visibility
Tools to automate customer
communications
Real-time business intelligence and
Kuldeep Uttam IIT
Roorkee
Total Cost of
Ownership
Camelot: Partners
Industry
Customers of 3PLs
Automotive
Technology
Retailing
Consumer Products
Food and Grocery
Healthcare
Industrial and Elements
Other
Total Costs
Global
Costs
Domestic Costs
(USA)
$98.2
$156.4
$98.6
$13.6
$32.2
$38.4
$179.7
$63
$678.3
$37.4
$77.4
$67.2
$13.3
$27.8
$34.0
$84
$25.3
$366.3
200
5
Source: 2005 Tenth Annual 3PL Study, Georgia Tech and Cap Gemini LLC.
Used with permission
Kuldeep Uttam IIT
Roorkee
WMS / TMS
Types of 3PL
Providers
Forwarder-Based
Types of 3PL
Providers
Financial-Based
Types of 3PL
Providers
Information-Based
Shifts of Logistical
Operations in the
Internet Economy
Traditional logistics
E-logistics
Predictable
Variable
Weekly
Daily or hourly
Customer
Strategic
Broader base
Customer service
Reactive, rigid
Responsive, flexible
Replenishment
Scheduled
Real-time
Distribution model
Supply-driven (push)
Demand-driven (pull)
Demand
Stable, consistent
More cyclical
Shipment type
Bulk
Smaller lots
Destinations
Concentrated
More dispersion
Warehouse reconfiguration
Weekly or monthly
Continual, rules-based
Manual
Automated
Orders
Nature of E
Commerce
Relationship
Perspectives
AS Supply chain MANAGER CAN YOU AFFORD TO KEEP A 3PL
AT ARMS LENGTH
OR SHOULD YOU BUILD A CLOSE
STRATEGIC PARTNERSHIP WITH YOUR 3PL PROVIDER ?
Transactional
Relationship
Both parties in a vendor relationship are
said to be at
arms length
There isnt much discussion with the 3PL
company.
Pricing is one of the Most important
factors.
Contracts in this scenario are the shortest.
Collaborative
Relationship
The relationship suggested by a strategic
alliance is one in which two or more business
organizations cooperate and willingly, modify
their business objectives and practices to
help achieve long-term goals and objectives.
There is a greater interaction and discussion
between the 3PL company as compared to
transactional relationship.
Strategic Relationship
Environmental Concern
in
3PL
There has been rapid growth in the attention directed
toward environmental burden, and it is now important to
consider environmental issues.
Environmental Concern
in
3PL
ISO14001 certification is one example. Each firm has an
incentive to acquire it to enhance the reputation and
market value of the firm. Indeed, the number of shipping
companies that address environmental issues in their CSR
(Corporate Social Responsibility) activities is increasing.
3PL BUYING
PROCESS
Multi
criteria
decision
making
(MCDM)
process
in
which a
decision
maker
chooses
, under
several
selectio
n
criteria,
alternati
the
Evalua
te
Proce
ss
Sele
ct
Objective Factors
Transportation
Cost
Insurance Cost
IT
Material Handling
cost
Reverse Logistics
Objective Factors
Table
Transpo
rtat Insuranc
ion
e
IT
Material
Handlin
g cost
Rever
se
Logist
ics
Sum OFM
DHL
8.3
1.64
0.25
0.025
12.21 0.656
5
77
FedEx
6.3
1.26
0.2
1.5
0.065
9.325
Hitac
hi
Nipp
on
Expr
7.4
1.42
0.35
3.6
0.034
12.80 0.586
4
81
1.8
0.56
6.3
0.085
17.74
5
Subjective Factors
Reliability
Responsiveness
Safety & Security
Experience &
Reputation
Benefits & Risk
Sharing
Subjective Factors
Experienc
Table Safet
y&
e&
Reliabil Responsiven
Securi
ity
ess
ty
Reputatio
n
Benefits &
Risk
Sharing
Weights
0.25
0.35
0.2
0.1
0.1
DHL
FedEx
Hitachi
Nipp
on
Expre
ss
4 : Extremely
Favorable. 3:
Moderately
Favorable.
2: Unfavorable.
1: Bad Service.
Reliablity Responsiven
ess
y&
Secur
ity
ce &
Reputati
on
Risk
Sharing
Weights
0.25
0.35
0.2
0.1
0.1
DHL
0.75
0.5
0.5
FedEx
0.5
0.75
Hitachi
0.5
0.25
0.75
0.5
0.75
SFM
0.71
25
0.87
5
0.48
75
Nipp
on
Expre
ss
0.25
0.75
0.25
0.25
0.5
Weights
DHL
FedEx
Hitachi
NipponExpr
ess
SFM
OFM
0.6
0.4
0.7125
0.656769596
0.69021
0.875
0.925
0.4875
0.586817102
0.52723
0.5
0.3
Decisi
on
Measu
re
Future Concern