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Logisticsoutsourcing 130223013115-phpapp02
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Transcript of Logisticsoutsourcing 130223013115-phpapp02
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Logistics Outsourcing• By Marwan Bahgat
ARAB ACADEMY FOR SCIENCE, TECHNOLOGY & MARITIME TRANSPORTInstitute of International Transport and Logistics
Supervised by:Prof. Dr.Islam Al-Naqeeb
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Chapter 1Logistics and Supply Chain
Management
Logistics and supply chain definition
• Logistics Management
• Supply Chain Management (CRM)
• Deference between logistics and supply chain
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Chapter 1Logistics and Supply Chain
Management
Logistics and supply chain definition
• Logistics Management
• Supply Chain Management (CRM)
• Deference between logistics and supply chain
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Chapter 1Logistics and Supply Chain
Management
Logistics and supply chain definition
• Logistics Management
• Supply Chain Management (CRM)
• Deference between logistics and supply chain
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Chapter 1Logistics and Supply Chain
Management
Conclusion• Logistics management is only an integral portion
of supply chain but this is vary between organizations
• We can say the supply chain and logistics is two terms if they combined in one sentence diverged in the meaning and vise versa
• Finally, SCM is a business philosophy that enables individual companies and channel partners to achieve high levels of productivity, profit and growth.
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Chapter 1Logistics and Supply Chain
ManagementImportance of logistics
• Logistics as a percentage of GDP
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Chapter 1Logistics and Supply Chain
ManagementImportance of logistics
• Profit impact of logistics cost saving
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Chapter 1Logistics and Supply Chain
Management
Importance of logistics
• Logistics Customer service Expectations Are Increasing
• Supply and Distribution Lines Are Lengthening with Greater Complexity
• Supply chain Is Important to Strategy
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Chapter 1Logistics and Supply Chain
Management
Importance of logistics
• Logistics Customer service Expectations Are Increasing
• Supply and Distribution Lines Are Lengthening with Greater Complexity
• Supply chain Is Important to Strategy
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Chapter 1Logistics and Supply Chain
Management
Importance of logistics
• Logistics Customer service Expectations Are Increasing
• Supply and Distribution Lines Are Lengthening with Greater Complexity
• Supply chain Is Important to Strategy
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Chapter 1Logistics and Supply Chain
Management
Case Study
vs.
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Chapter 1Logistics and Supply Chain
Management
Importance of logistics
• Supply Chain Adds Significant Customer Value
• Supply chain provides competitive advantages
• Supply chain Shifts in Channel Power
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Chapter 1Logistics and Supply Chain
Management
Importance of logistics
• Supply Chain Adds Significant Customer Value
• Supply chain provides competitive advantages
• Supply chain Shifts in Channel Power
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Chapter 1Logistics and Supply Chain
Management
Importance of logistics
• Supply Chain Adds Significant Customer Value
• Supply chain provides competitive advantages
• Supply chain Shifts in Channel Power
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Chapter 1Logistics and Supply Chain
Management
The main supply chain role and activities
• Customer Service• Demand Forecasting• Inventory management• Materials Handling• Order Processing• Packaging
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Chapter 1Logistics and Supply Chain
Management
The main supply chain role and activities
• Plant and Warehouse Site Selection• Parts and Service Support• Procurement• Reverse Logistics• Traffic and Transportation• Warehousing and Storage
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Chapter 1Logistics and Supply Chain
Management
Integration of logistics activity
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Chapter 1Logistics and Supply Chain
Management
Logistics activity Trade-offs• Inventory vs. Customer Service
• Inventory and economies of scale
• Going green in the supply chain
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Chapter 1Logistics and Supply Chain
Management
Logistics activity Trade-offs• Inventory vs. Customer Service
• Inventory and economies of scale
• Going green in the supply chain
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Chapter 1Logistics and Supply Chain
Management
Logistics activity Trade-offs• Inventory vs. Customer Service
• Inventory and economies of scale
• Going green in the supply chain
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Chapter 2Logistics Outsourcing
Logistics Outsourcing DefinitionKey Element:• Deciding to obtain selected, recurring, non-core goods and
services previously provided internally, from outside the company• Finding outside providers and new ways to secure the delivery of
raw materials, goods, components and services, by • Utilizing the knowledge, experience, creativity and facilities or
capabilities of new providers not used previously, thus• Handing over or transferring the planning, management and
operation of certain functions to an independent third party, and• Using formalized agreements/contracts and payment.
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Chapter 2Logistics Outsourcing
The development of the outsourcing concept• “Smaller is beautiful” concerns over conglomeration
and vertical integration
• The rise and rise of core competence thinking
• The emergence of outsourcing as a key business practice
• Primary supply chain outsourcing
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Chapter 2Logistics Outsourcing
The development of the outsourcing concept• “Smaller is beautiful” concerns over conglomeration
and vertical integration
• The rise and rise of core competence thinking
• The emergence of outsourcing as a key business practice
• Primary supply chain outsourcing
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Chapter 2Logistics Outsourcing
The development of the outsourcing concept• “Smaller is beautiful” concerns over conglomeration
and vertical integration
• The rise and rise of core competence thinking
• The emergence of outsourcing as a key business practice
• Primary supply chain outsourcing
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Chapter 2Logistics Outsourcing
The development of the outsourcing concept• “Smaller is beautiful” concerns over conglomeration
and vertical integration
• The rise and rise of core competence thinking
• The emergence of outsourcing as a key business practice
• Primary supply chain outsourcing
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Chapter 2Logistics Outsourcing
Why Outsourcing?
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Chapter 2Logistics Outsourcing
Benefits of Business Process Outsourcing
• Best in Class Capabilities
• Better Use of Company Resources
• Reduce Operating Costs
• Reduce Business Risk
• Company Lacks Necessary Resources
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Chapter 2Logistics Outsourcing
Benefits of Business Process Outsourcing
• Best in Class Capabilities
• Better Use of Company Resources
• Reduce Operating Costs
• Reduce Business Risk
• Company Lacks Necessary Resources
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Chapter 2Logistics Outsourcing
Benefits of Business Process Outsourcing
• Best in Class Capabilities
• Better Use of Company Resources
• Reduce Operating Costs
• Reduce Business Risk
• Company Lacks Necessary Resources
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Chapter 2Logistics Outsourcing
Benefits of Business Process Outsourcing
• Best in Class Capabilities
• Better Use of Company Resources
• Reduce Operating Costs
• Reduce Business Risk
• Company Lacks Necessary Resources
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Chapter 2Logistics Outsourcing
Benefits of Business Process Outsourcing
• Best in Class Capabilities
• Better Use of Company Resources
• Reduce Operating Costs
• Reduce Business Risk
• Company Lacks Necessary Resources
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Chapter 2Logistics Outsourcing
Levels of logistics outsourcing
• In-house logistics
• Logistics service provider (LSP)
• Third party logistics (3PL/TPL)
• Fourth party logistics (4PL/FPL)
• Fifth party logistics (5PL)
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Chapter 2Logistics Outsourcing
Levels of logistics outsourcing
• In-house logistics
• Logistics service provider (LSP)
• Third party logistics (3PL/TPL)
• Fourth party logistics (4PL/FPL)
• Fifth party logistics (5PL)
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Chapter 2Logistics Outsourcing
Levels of logistics outsourcing
• In-house logistics
• Logistics service provider (LSP)
• Third party logistics (3PL/TPL)
• Fourth party logistics (4PL/FPL)
• Fifth party logistics (5PL)
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Chapter 2Logistics Outsourcing
Levels of logistics outsourcing
• In-house logistics
• Logistics service provider (LSP)
• Third party logistics (3PL/TPL)
• Fourth party logistics (4PL/FPL)
• Fifth party logistics (5PL)
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Chapter 2Logistics Outsourcing
Levels of logistics outsourcing
• In-house logistics
• Logistics service provider (LSP)
• Third party logistics (3PL/TPL)
• Fourth party logistics (4PL/FPL)
• Fifth party logistics (5PL)
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Chapter 2Logistics Outsourcing
IMPACT OF OUTSOURCING LOGISTICS
Advantages of Logistics Outsourcing
• Cost Reduction• Service and Technology Improvement• Strategic Flexibility• Capital Investment Saving• Focus on Core Competency• Sharing and Reducing Risks
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Chapter 2Logistics Outsourcing
IMPACT OF OUTSOURCING LOGISTICS
Disadvantages of Logistics Outsourcing
• Loss of Control over the Supply Chain
• Minimization of Cost Awareness
• Lack of Improvement and Innovative Ability
• Human Resource not adjusted to the new environment
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Chapter 2Logistics Outsourcing
Logistics Outsource Process
• System Takeover
• Joint Ventures
• System “Spin-off”
• Management-only Contract
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Chapter 2Logistics Outsourcing
Logistics Outsource Process
• System Takeover
• Joint Ventures
• System “Spin-off”
• Management-only Contract
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Chapter 2Logistics Outsourcing
Logistics Outsource Process
• System Takeover
• Joint Ventures
• System “Spin-off”
• Management-only Contract
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Chapter 2Logistics Outsourcing
Logistics Outsource Process
• System Takeover
• Joint Ventures
• System “Spin-off”
• Management-only Contract
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Chapter 2Logistics Outsourcing
SUCCEED IN LOGISTICS OUTSOURCING
• Making the Decision
• Evaluating the Operations and Developing Criteria and Objective
• Making the List and Sending Letters
• Beginning the New Partnership
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Chapter 2Logistics Outsourcing
Myths of Logistics Outsourcing
• If the outsourcing does not work you can always bring the activity back
• The smartest people in the game work in 3PL
• The smartest people in the game work on the customer side
• Once you outsource, you can relax and let them handle all the work
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Chapter 2Logistics Outsourcing
Myths of Logistics Outsourcing
• If the outsourcing does not work you can always bring the activity back
• The smartest people in the game work in 3PL
• The smartest people in the game work on the customer side
• Once you outsource, you can relax and let them handle all the work
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Chapter 2Logistics Outsourcing
Myths of Logistics Outsourcing
• It’s an equal win-win partnership
• Your logistics service provider is responsible for their own mistakes
• Lock it in a contract and squeeze the last penny out of your logistics service provider
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Chapter 3Procurement Outsourcing
Introduction
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Chapter 3Procurement Outsourcing
What is Procurement Outsourcing?
Benefits of Procurement Out sourcing
Procurement Outsourcing Disadvantage
Procurement Outsourcing Risks
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Chapter 3Procurement Outsourcing
Procurement Outsourcing Scope
• Transactional Buying and Settlement
• Measurement and Development
• Selection and Contracting
• Sourcing Strategy Development
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Chapter 3Procurement Outsourcing
Procurement Outsourcing Scope
• Transactional Buying and Settlement
• Measurement and Development
• Selection and Contracting
• Sourcing Strategy Development
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Chapter 3Procurement Outsourcing
Procurement Outsourcing Scope
• Transactional Buying and Settlement
• Measurement and Development
• Selection and Contracting
• Sourcing Strategy Development
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Chapter 3Procurement Outsourcing
Procurement Outsourcing Scope
• Transactional Buying and Settlement
• Measurement and Development
• Selection and Contracting
• Sourcing Strategy Development
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Chapter 3Procurement Outsourcing
Implementation
Implementation Approach
• Consult, fix and outsource
• Consult, outsource and fix
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Chapter 3Procurement Outsourcing
Implementationkey prerequisites for maximizing success
• Managing risks due to reduced control over the process
• Managing continuity of service delivery
• Managing personnel and process transition issues
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Chapter 3Procurement Outsourcing
Implementationkey prerequisites for maximizing success
• Managing technology integration issues
• Managing expectations and consensus (HR, IT, Legal & Finance)
• Joint governance and service innovation board
• Measuring success
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Chapter 3Procurement Outsourcing
ImplementationEvaluating and selecting a procurement service provider (PSP)
selection criteria• Category expertise• Sourcing Process Methodology• Operational Excellence• Experience and Customer References• Financial stability
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Chapter 3Procurement Outsourcing
Future Growth
• 45% pressures to lower procurement transaction costs
• 41% increased global competition
• 36% need to gain access to improved pricing
• 34% pressures to re-focus personnel on more strategic activities.
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Thank You
Prepared by Marwn Bahgat
Under supervision ofProf. Dr. Islam Al Naqeeb