3PL Presentation
Click here to load reader
-
Upload
spyrospeiraias -
Category
Documents
-
view
303 -
download
17
description
Transcript of 3PL Presentation
THIRD PARTY LOGISTICS 3PL
Overview Introduction
Definition of Third Party Logistics (3PL)
3PL Evolution
Current 3PL Market
Types of 3PL Providers By Services
By Operations
By Contract Type
Role of Third Party Logistics in Supply Chain & Company Performance Logistics Outsourcing
Selection Criteria for 3PL Selection
3PL Relationships
Challenges of EPL
“ ”
Organizations move materials (tangible & intangible) to support their operations
LOGISTICS is responsible for these movements; it manages the transport & storage of materials from original suppliers through
supply chains and to its final customers
3PL Definition A third-party logistics (3PL) is a firm that provides services to its
customers of outsourced (or third-party) logistics services for part or all of their supply management function Preferably, these services are integrated, or bundled together, by the provider. Among the services 3PLs provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding
[Wikipedia] A firm that provides multiple logistics services for use by
customers. Preferably, these services are integrated, or bundled together, by the provider. Among the services 3PLs provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding
[CSCM]
Evolution
Types of 3PL
▪ SERVICES • Standard 3PL Providers • Service Developers 3PL • Customer Adapters 3PL • Customer Developers
▪OPERATIONS • Transportation-Based • Warehouse/Distribution-Based • Forwarder-Based • Financial-Based • Information-Based
▪CONTRACT • Fixed fee. • Cost plus. • Fixed/Variable pricing
•FedEx •UPS •Ryder
Transportation-Based
• DSC Logistics
• IBM
Warehouse/ Distribution-Based
• Kuehne & Nagle
• Hub Group • Fritz
Forwarder-Based
• Cass Information
• GE Information
• FleetBoston
Financial-Based
Types of 3PL
Transportation-Based
Services are provided beyond transportation and offer different set of logistics offerings
Leveraged 3PL use assets of other firms
Non-leveraged 3PL use assets that belong only to the parent firm
Warehouse/Distribution-Based
Some of the companies have warehouse and/or distribution expertise
Forwarder-Based
They are independent middlemen who extend forwarder roles
They are owners with no-assets, but are capable in providing a variety of logistics services
Financial-Based
This type of 3PL provides freight payment and auditing, accounting services and control, tools to monitor, bookings, tracking, tracing and managing inventory
Drivers & Challenges
Drivers & Challenges There are a large number of
advantages and disadvantages claimed for and against both third
party and in-house distribution. The major drivers can be split into
different categories as follows:
▪ Organizational ▪ Financial ▪ Service ▪ Physical
Drivers - Benefits
Organizational Focus on their core business or core competence Access to wider knowledge
Financial Capital cost advantages Improved cash flow Converting fixed cost to variable Economies of scale Operating cost savings Clearer picture of actual operating costs
Drivers - Benefits
Service Greater flexibility Value added services Logistics service improvements
Physical Complexity Industrial relations problems Vehicle Delivery characteristics or requirements Product incompatibility
Challenges
Organizational Lacking of the appropriate experience Cultural incompatibility Loss of control over the delivery operation Loss of control over the company’s logistical
variables Loss of distribution and logistics expertise Loss of direct influence at the point of
delivery Brand integrity Confidentiality of information issue
Challenges
Financial Changeover costs
Service If services are not managed nicely, they
may cause great problems for the company reputation, and firm's position
Third party failure can cause major interruption to the operations of company
3PL Market with Figures
3PL Market with Figures
Region
2010 Global
3PL Revenues (US$Billions)
2011 Global 3PL Revenues
(US$Billions)
Percent Change 2010 to
2011
North America 149.1 159.9 + 7.2%
Europe 165.1 160.4 - 2.8%
Asia-Pacific 157.6 191,1 + 21.2%
Latin America 27.5 39.5 + 43.6%
Other Regions 42.3 65.2 + 54.0%
Total $ 541.6 $ 616.1 + 13.7%
GLOBAL 3PL REVENUES UP FOR 2010-2011
2012 2013
3PL Market with Figures INDUSTRIES USING 3PL SERVICES
12 12 11 10 11 12 11 12 14 15
42 39 38
33
46
55
47
31 35
39
56 54
41 42
66
71
61
45
66
60
39 36 36
31
42
48
42
32
40
30
0
10
20
30
40
50
60
70
80
All Regions12
All Regions13
NorthAmerica 12
NorthAmerica 13
Europe 12 Europe 13 Asia Pacific12
Asia Pacific13
LatinAmerica 12
LatinAmerica 13
Outsourcing Spending Patterns (%)
Total Logistics Expenditures as aPercentage of Sales Revenues
Percent of Total Logistics ExpendituresDirected to Outsourcing
Percent of Transportation Spend Managedby Third Parties
Percent of Warehouse OperationsSpend Managed by Third PartiesPercent of Warehouse OperationsSpend Managed by Third Parties
3PL Market with Figures
3PL Market with Figures
Outsourced Logistics Service All Regions
North America
Europe
Asia-Pacific
Latin America 3PL
Percentages International Transportation 76% 64% 86% 79% 82% 71% Domestic Transportation 71 67 81 76 61 88 Warehousing 63 61 72 59 51 83 Freight Forwarding 53 54 60 46 47 64 Customs Brokerage 52 52 57 44 57 54 Reverse Logistics (defective, repair, return) 26 27 31 23 19 60
Cross-Docking 25 29 31 18 19 64 Product Labeling, Packaging, Assembly, Kitting
25
25
31
21
20
65 Transportation Planning and Management 22 24 27 19 15 70
Inventory Management 19 16 15 21 17 64 Freight Bill Auditing and Payment 18 32 13 11 5 34 Order Management and Fulfillment 16 20 18 16 9 65 Information Technology (IT) Services 13 16 16 14 9 50 Service Parts Logistics 12 11 14 12 12 39 Customer Service 10 8 7 17 14 67 Supply Chain Consultancy Services Provided by 3PLs
10
14
7
9
9
56
Fleet Management 8 8 8 8 9 26 LLP (Lead Logistics Provider) / 4PL Services 8 8 17 4 4 39
Sustainability/Green Supply Chain-Related Services
6
3
7
6
6
31
3PL Market with Figures
0% 20% 40% 60% 80%100%
Logistic Cost reduction
Inventory Cost Reduction
Fixed Asset Reduction
OFR from
OFR to
OA from
OA to
15%
8%
26% 58%
65%
67%
72%
13%
9%
25% 70%
79%
80%
87%
15%
25%
11% 73%
81%
83%
89%
201020122013
SATISFACTION & SUCCESS MEASURE
So… Outsourcing?
3PL Selection Process
Managing 3PL Relationship
The 3PL/client relationship is a relationship where ‘partnership’ can provide the basis for the business relationship. Good partnerships will encourage the sharing and joint development of a strategic vision. Not only does a client get the benefit of the 3PL’s thoughts and experiences, it also achieves their buy-in for the realization of the vision.
A high degree of trust and collaboration is required
Managing 3PL Relationship
For almost all new outsourcing arrangements, the initial issue after the contract has been successfully negotiated is the successful implementation of the operation. As with any large business project it is essential to identify and agree a project plan to ensure that responsibilities are clear and that there is a feasible timetable for implementation.
Measure whether the 3PL is meeting set service levels at an acceptable cost
Establish metrics (indicative): Monitoring against the contract
Monitoring against the SLA (service level agreement): The service level agreement should identify KPIs and link the supplier’s payment to performance against them
Budgetary control
Management information and metrics
Review meetings:
Monitoring & Measuring 3PL
Objectives Identify the reasons why a company
outsource the logistic operations Manage, support and fulfill customer
demand in all serviced regions How to select the right 3PL Logistic
partner in order to reach logistic optimization
In which business sectors there is 3PL Logistics implementation
Explain how 3PL Logistics optimize price setting, increase sales and reduce shipping costs to maximize customer satisfaction
References • Alan Rushton, Phil Croucher and Peter Baker. The Handbook of Logistics and Distribution
Management. 4th. 2010.
• C. John Langley, Jr., Ph.D., and Capgemini. 2013 Third-Party Logistics Study: The State of Logistics Outsourcing. 2013.
• C. John Langley, Jr., Ph.D., and Capgemini. 2012 Third-Party Logistics Study: The State of Logistics Outsourcing. 2012.
• Ansari, Al, & Modarres, Batoul. Challenges of outsourcing logistics to third-party providers. International Journal of Logistics Systems and Management. 2010, Vol. 7, 2
• Martin Christopher. Logistics and Supply Chain Management. 4th. 2011
• Ansari Al, Diane Lockwood & Modarres, Batoul. Outsourcing logistics to third-party prooviders: practitioners perspectives. International Journal of Logistics Systems and Management. 2010, Vol. 6, 1
THANK YOU