THIRD PARTY

LOGISTICS (3PL)
AND FOURTH
PARTY
PRESENTED BY
ARPITA K R (080)
LOGISTICS (4PL)
JAVAD SHAIKH (078)
GOURAV BHOSALE (077)
JOCELINE JOY (079)
LOGISTICS
Logistics is the management of the flow of goods
from ORIGIN TO DESTINATION to meet customer
requirement
TRANSORTATION

SECURITY INVENTORY

Logistics

PACKAGING WAREHOUSE

INFORMATION
MANAGEMENT
Why logistics is required
 TO THE RIGHT PLACE
 AT THE RIGHT TIME
 IN THE RIGHT QUANTITY
 AT THE RIGHT QUALITY
 AT THE RIGHT PRICE
WHY OUTSOURCING?

1 • Avoid Capital Expenditure

2 • Cut Costs

3 • Increase Flexibility (Service/Financial)

4 • Focus on Core business

5 • Improve Service

6 • Lack of Skill

7 • Acquire Talent

8 • Avoid Labour Problems

Third Party Logistics (3PL or TPL)
- An asset based company that offers logistics
and supply chain management services to its
customers.
- Commonly owns and manages DCs and
transport modes
- Example
If a company with its own warehousing
facilities decides to employee external
transportation, this would be an example of
TPL.
Evolution of 3PL market
In 1980’s many transportation and warehousing
firms developed into 3PL providers. (Eg: Excel
Logistics and Frans Maas)

In early 1990’s firms that specialized in express

parcel deliveries entered the markets.

In late 1990’s, companies originally specializing in

financial services, IT services and management
consulting entered the market by developing
competency in Information systems and supply
chain planning.
Flow of 3PL
Types of 3PL
Standard 3PL provider
-Pick and Pack
-Warehousing
-Distribution
Service Developer
-Tracking and tracing
-Cross Docking
-Specific packaging
-Unique security system
Customer Adapter
-Depends on request of customer
-Does not develop a new service
-Takes complete control of logistics activities
ADVANTAGES DISADVANTAGES

Cost Reduction Loss of control over the logistics

Improved Efficiency, Service and
flexibility
Focus on core competency
functions
Impact on in-house workforce
More distance from clients-loss of
personal touch

Freeing up resources Discontinuity of services of a 3PL

provider
Elimination of infrastructure Differences of perception of the
resources service level of 3PL provider

Risk- Sharing

Better Cash Flow

Access to resources not available at

one’s own organisation
Fourth Party Logistics (4PL)
 A single interface between client and multiple
logistics service providers
 Managing client’s entire supply chain
 A 3PL can form 4PL organization within its
existing structure
 Also referred as lead logistics providers
 Non asset owing service providers
Types of 4PL

Synergy plus
Operating
Model

Solution Industry
Integrator Innovator
Model Model
Synergy plus Operating Model
 Partnership between 4PL and 3PL
 Capabilities and Market reach of both partners
are combined
 Providing below by program management
expertise:
◦ Technology
◦ Supply Chain Strategy skills
◦ Capability to go to market
Solution Integrator
4PL operates comprehensive supply chain
solutions for a single Client
 Solution encompasses
◦ Resources
◦ Capabilities
◦ Technology
Of 4PL with complementary service providers
Industry Innovator Model
 Develops and runs a supply chain solution for
multiple industry players
 Focusing on synchronization and collaboration
 Provides greatest benefits
 Complex and a great challenge
Why do you need 4PL?

High order- Shifting

Global
to-delivery revenue
Need and growth,
cycle time recognition
demand for more
and order point and
IT resources inventory in
to cash Global
more places
cycles Expansion
ADVANTAGES DISADVANTAGES

Economies of Scale Losing sight of original core concept

of SCM due to loss of control

Reduce Supply chain costs Customer relationships dismissed on

basis of efficiency

Increase Flexibility Strict functional organisation structure

Combines the advantages of In Resistance to change

sourcing and Out sourcing

Manufacturers can focus on core

competency

Improved customer service

Reduced capital requirements

Differences (3PL and 4PL)
 Example of 3th party logistics
 Alliance Shippers
 Americold
 APL Logistics
 Approved Freight Forwarders
 FedEx Supply Chain
 Saddle Creek Logistics Services
 Schenker
 Schneider
 SEKO Logistics
 Sunset Transportation
 Swift Logistics
 Syfan Logistics
 syncreon
 Union Pacific Distribution Services
 Universal Logistics Holdings
 Example of 4th party logistics
 At DHL, being a Fourth Party Logistics (4PL) provider means instigating and managing
change across your entire supply chain, to meet changing business and customer demands.
We do this by – bringing continuous improvement and cost reduction, introducing lean
logistics processes and optimising logistics networks.
 A successful 4PL provider is built upon a strong and effective partnership arrangement
with our customer to deliver value to their business, and encompasses a whole range of
skills and experience that we deploy to meet the needs of your business.These include:
◦ Network analysis and design
◦ Consultancy
◦ Business planning
◦ Change management
◦ Project management
◦ Control tower and network management services, coordinating a wide supplier base
across many modes and geographies
◦ Inventory planning and management
◦ Inbound, outbound and reverse logistics management.
 We take responsibility for assembling and controlling the resources, capabilities and
technologies of our own organisation with those of complementary service providers. We
assume accountability for the management, performance, cost and development of all
supply chain functions, transactions, systems and suppliers within an agreed scope, which
may change over time.