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Session 16 -17
03/18/15
ITS, UC Irvine
Overview
Define Third Party Logistic
How 3PL is different from
transportation providers
Why businesses use 3PL
Services provided by 3PL companies
How to choose a 3PL for your
business
The move to 4PL: what is new, what
is next, changes, etc
SUPPLY CHAIN
CUSTOMER
PLAN
Inventory planning
SOURCE
Distribution planning
DELIVER
MAKE
Production planning
Capacity planning
Transportation Planning
Order Fulfillment
Shop scheduling
Warehouse Management
Manufacturing Flexibility
Inventory Management
Procurement
Production Management
Transportation management
Sourcing
Manufacturing Flow
Management
Trading Partner
Management
Reverse Logistics
Trade Management
Transportation
Shipper
Shipper
3PL
Warehousing
IT support
Shipper
In-house Operation
SC
integration
Shipper
In-house Logistics
Department
Others
IT support
Transportation
03/18/15
Others
Warehousing
ITS, UC Irvine
Industry Evolution
Third Generation
( 2000 and beyond)
Second Generation
(1980s - 1990s)
First Generation
(1970s - 1980s)
Web-based 3PLs
Shippers agents
ITS, UC Irvine
10
IM5M/KSSM
11
Inventory
Delivery control
Transportation
Supply
Chain
Optimization
Customer
Service
Value
added
Service
Special
Handling
Requirement
Cost
Control
Change
Management
13
In-sourced
Baselines
Outsourced
Results
10-20d
7-12d
48-24h
24-6h
Inventory Accuracy
80-90%
95-99%
Product Availability
90-95%
95-99%
Picking Accuracy
98%
99.5%
Pick/Pack Throughput per Emp 150-157
Overall Throughput per Emp
75-100
Space Utilization
80%
Reduced Damaged Products
100%
1-2%
Actual results from a 3PL outsourced program for an international beverage brand
IM5M/KSSM
leader, August 2001, Malaysia
225-250 OM/MA, h
125-150 OM/MA, h
700.1-0.5%
14
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)
ITS, UC Irvine
Third-Party Logistics
(3PL):
Definitions
ITS, UC Irvine
16
Third-Party Logistics
(3PL):
Types of 3PL Providers
Transportation-Based
ITS, UC Irvine
17
ITS, UC Irvine
19
Third-Party Logistics
(3PL):
Types of 3PL Providers
Forwarder-Based
20
Third-Party Logistics
(3PL):
Types of 3PL Providers
Financial-Based
21
Information Based
Significant growth and development in
this category of Internet-based,
business-to-business, electronic
markets for transportation and logistics
services.
Examples: Transplace, Nistevo
Contract Logistics
Success Stories
1. Toyota (Georgetown, KY)
Ryder Distribution Resources provides turnkey
consolidated delivery of auto parts from key U.S.
manufacturers
Includes a wide range of material management activities:
Transportation, Verification of correct orders, Inventory
control
2. Land Rover (North American operation)
Caterpillar Logistics Service: world wide parts warehousing
and distribution services to dealers, including guaranteed 48hour expedited deliveries
3. Motorola (emergency parts)
Skyway Systems, Inc.: critical parts logistics center in L.A.
to
ship parts air freight to technicians nationwide
On the Line:
Trade Team
Excel, the largest provider of brewery
distribution services in Great Britain, and
Bass, the industrys low-cost producer, formed
Trade Team, the UKs leading independent
logistics provider to the beverage industry.
Annual sales of $200 million; 280 million
gallons of beer and other beverages to over
27,000 retail customers; 40-50% market
share.
Has capability to move other products.
24
Third-Party Logistics
Research Study: Industry
Details
Of 93 responding executives, 71 percent
Industry
Computer
Consumer
Retail
Chemical
Medical
Auto
03/18/15
ITS, UC Irvine
Current State
-- Market Size
3PL market is
growing
($
Billions )
03/18/15
ITS, UC Irvine
27
ITS, UC Irvine
28
Figure 11-13
3PL Factors for Selecting and Evaluating
3PLs
30
Third-Party Logistics
Research Study:
Industry Details
Third-Party Logistics
Research Study:
Industry Details
JetEx Logistics
JetEx Logistics is one source for all transportation,
shipping and distribution services. JetEx Logistics
is an asset based 3PL provider offering the latest
in technology, equipment and services to ensure
your products and shipments arrive on time,
every time, across town or across country.
As an asset based 3PL provider we use a
combination of both owned and contracted assets
with access to over 200,000 trucks (LTL &
Truckload Carriers) nationwide and will provide
you the best possible resources to facilitate your
transportation and distribution supply chain
needs.
A Note on Fourth-Party
Logistics
4 PL Market
Buoyed by these trends, the 4PL
market as a whole is expected to
witness considerable revenue growth
from approximately EUR 4.7 billion in
2002 to about EUR 13 billion by 2010.
The 4PL market in western Europe is
set to make its presence strongly felt
in the chemicals, electronics/hightech and automotive sectors.
03/18/15
ITS, UC Irvine
38
Figure 11-15
Fourth-Party Logistics (Registered
Trademark of Accenture, Inc.)
39
5 PL 1. TRANSPORTATION
Courier, Air, Rail, Road, Inland Waterways,
Ocean or
Multi-modal
- Service provider details
- Services offered
- Market rates
- Different routes
- Transshipment points
- Transit times
- Insurance coverages
- Imbalance of containers
5 PL cont
2. TECHNOLOGY:- Global positioning system
- Swipe card system
- Bar coding
- Packaging
3. IT:- Specialised softwares (e.g.. Fleet
Management)
- Tailor-made softwares
Questions?