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Third Party Logistics(3PL)

Presented by :- Shailendra Kumar Suman

Adm. No:- 2008 MT 0079


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?

What comes to our mind when we thinkabout transportation as a function of

logistics


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But it also includes such OverDimension Consignments


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Transportation of modules


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Support fixtures


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Trailer design


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Road widening


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Which involves

Lifting the consignment (arranging for cranes) Deciding the transportation means (type oftruck- special design or barge) Preparing the fixtures for safe transportation Conducting route survey (road, bridges, waterlevel)

Strengthening bridges Taking various permits


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LOGISTICS is a vital component of a

company's strategy to improve performance.Manufacturers abroad have realised that the best

way to improve performance is to concentrate onthe core competence making a product, andoutsourcing the rest, including logistics from a thirdparty logistics (3PL-Third party logistic) service

provider.

LOGISTICS


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Company's realised that the best way toimprove performance

Avoid Capital Expenditures

Increase Flexibility (service/financial)

Focus on Core Business

Improve Service

Lack of Scale

Acquire Talent

Avoid Labor Problems

Cut Costs

Source: A.T. KearneyWhy Third Party Logistics(3PL) Required


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Description Savings Realized

Route Design & Optimization

Closed Loop Dedicated Operations

Mode Conversion

Core Carrier Management

Rate Negotiation & Audit

Inbound ConsolidationReverse Logistics

DC Location Realignments

Reduced Inventory

10-15%

15%

10-15%

5-10%

4-5%

20-25%10-15%

10-12%

7-10%

Contract Logistics Savings Potential


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How 3PL originated

Globalization Manufacturing revolution Reengineering

Technological growth

Outsourcing of logistics


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3PL Vs. Transportation Services


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Degree of commitment

Singletransaction

Repeatedtransactions

Partnershipagreement

Third partyagreement

Integratedlogistics

Degree of integration

3PL

Introduction to 3PL


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A third-party logistics provider (abbreviated3PL) is a firm that provides outsourced or "thirdparty" logistics services to companies for part, orsometimes all of their supply chain management

functions. Third party logistics providers typicallyspecialize in integrated operation, warehousingand transportation services that can be scaled

and customized to customers needs based onmarket conditions and the demands and deliveryservice requirements for their products andmaterials.

Third Party Logistics An Overview
http://en.wikipedia.org/wiki/Logisticshttp://en.wikipedia.org/wiki/Supply_chain_managementhttp://en.wikipedia.org/wiki/Warehousinghttp://en.wikipedia.org/wiki/Warehousinghttp://en.wikipedia.org/wiki/Supply_chain_managementhttp://en.wikipedia.org/wiki/Logistics


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Third-party Logistics is simply the use of anoutside company to perform all or part of the firmsmaterials management and product distributionfunction. --

Simchi-Levi ( 2000 )

A relationship between a shipper and third partywhich, compared with the basic services, has morecustomized offerings, encompasses a broadnumber of service functions and is characterized bya long-term, more mutually beneficial relationship

--Murphy & Poist ( 1998 )

Third Party Logistics An Overview


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Introduction to 3PL

In-house LogisticsDepartment

Shipper

Transportation

IT support

Warehousing

Others

In-house Operation

OutsourcedOperation

3PL

Shipper

Shipper

Shipper

Transportation

Warehousing

IT support

SC integration

Others


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Services Provided By 3PLs

Transportation

Mgt

21%

Private Fleets

7%

Intermodal

4%

Warehousing21%

Value Added

20%International

9%

Integrated9%

Other

5%

Lead Logistics

4%


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Types of 3PL providersHertz and Alfredsson (2003) describe four categories of3PL providers:

Standard 3PL provider

Customerdeveloper

Servicedeveloper

Customeradapter

NonAsset-

basedLogisticsProviders


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Why Use 3PL?

1.To Save Time

2.To Share Responsibility

3.To Re-Engineer DistributionNetworks

4.Someone Else Can do itBetter


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What are the Selection criteriafor 3PL

Parameters Cost

On time delivery Level of customer service Flexibility demand fluctuation Past experience and client reference

Infrastructure capabilities


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3PL Benefits

1.Increase Supply Chain

visibility

2.Respond for newcustomers or processes

3.Increase your value-addthrough innovation

4.Business informationthrough Web-basedarchitecture


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3PL Gross Revenues by Industry

Insdustrial $18.

Other $2.90


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Why is it needed (Advantages / Disadvantages) ?

Advantageso Cost reduction

o Focus on core competency

o Improved efficiency, service and flexibility

o Industry-specific application

build-to-order systems and e-merchants

Disadvantages

o Loss of control

o Impact on in-house workforce


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3PL Market in India

Year 2005 2012(Estimated)

3PL market(in billion) 890.4 3556.7

GrowthRate

(in %)--- 21.9


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3PL Market in India

Largest end-user industry for3PL services as of 2005, is the

auto industry and company'sare

Suzuki

Honda Ford Others


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Geographicdiversity of

India

Infrastructurelimitations in

India

Congestedroadwaysand ports

Complicatedtax structure

Deep-rootedcorruption

Highbureaucratic

control

Few Challenge for 3PL in India


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Some Factors that are Driving IndianLogistics towards 3PL

Two major projectsGolden Quadrilateral network andNorth-South-East-West (NSEW) Corridor

1.Uniform tax regime(Value Added Tax)

2.Opened up rail freightoperations

3.Focus on improvinglogistics infrastructure


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Uniform tax regime (ValueAdded Tax)

Opened up rail freight operationsFocus on improving logisticsinfrastructure

Geographic diversity of India

Infrastructure limitations in India

Complicated tax structure


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Indian 3PL services Provider

Gati

DHL

FED-EX

Others(KTSPL,TVS)

TransportCorporationof India LTD

Blue dartlogistics

AFL Logistics


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Case Study


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Gati pioneered the concept of Retail ExpressCargo and Express Distribution in India

19 years working tenure Gati has the largest fleet of over 2100 vehicleson road, with a nation wide networkunmatched in the industry

Gati has connected businesses across theborder Providing seamless multi modal network

across road, air, rail and sea, & hold position in

the Express Distribution Segment.

Gati Profile Ahead in Reach


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Important Awards:-Ahead in Reach

1. First Logistics Company in India to beAwarded ISO -9001 certification ISO 9001-2000 in 1998.

Frost and Sullivan Award for the Best DomesticLogistics Company in 2003.

2. Award for the Best HR Practicesin Service

Industry by Amity International Business Schoolin 2005 & 2007.

3. Consumer Super Brand award in LogisticsCategory by Super brands, UK in 2006.


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Gati Services

1.Gati Surface Express2.Gati Air Express3.AI Gati4.Gati SCM

5.Gati Cold Chain6.Gati Europe Express7.Gati Global Express


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Premium Clientele


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Services Network


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Distribution NetworkLocations 414

Locations serviced 20000

Delivery capability 603 out of 611 Districts

Gati Associates 970

Routes 753

Vehicles 1146(Own vehicles-163)

Vendors 606

Handlers 1500

Weight Handled (per month) 37000 ton


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GLS serves 2,20,000 customers in Europe in 36countries, handling 311 million parcels, has 17,800vehicles, 32 transshipment points, employs 12,000

employees. Growing at a CAGR of 24% in the last 3 years, isexpected to grow at 27% from this year.

EBIDTA Growth Chart


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http://www.kandarptraders.com/index.htm


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KTSPLProfile Since 1992, Kandarp Tradelinks and

Services Private Limited. Engaged in abusiness of C & F Agency in North India.

Clients integrated bulk transport, freightforwarding, and logistics management

services, and to be a single window end-to-end logistics solution provider.

Customer Oriented and Customer Friendly

AHEAD IN LOGISTICS
http://www.kandarptraders.com/index.htm


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Total Logistics Solution

Heavy / ODC / Specialized

Third Party Logistics

Turnkey Logistics Contract Warehousing

Crane Hiring - Crane Rent

Project Cargo Services Supply chain solutions

Vendors Management System

Value Added Services

Services
http://www.globeecologistics.com/total_logistics_solution.htmlhttp://www.globeecologistics.com/heavy_odc_specialized.htmlhttp://www.globeecologistics.com/third_party.htmlhttp://www.globeecologistics.com/turnkey_logistics_contract.htmlhttp://www.globeecologistics.com/warehousing.htmlhttp://www.globeecologistics.com/crane_hiring.htmlhttp://www.globeecologistics.com/project_cargo.htmlhttp://www.globeecologistics.com/supply_chain.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/supply_chain.htmlhttp://www.globeecologistics.com/supply_chain.htmlhttp://www.globeecologistics.com/project_cargo.htmlhttp://www.globeecologistics.com/project_cargo.htmlhttp://www.globeecologistics.com/crane_hiring.htmlhttp://www.globeecologistics.com/crane_hiring.htmlhttp://www.globeecologistics.com/crane_hiring.htmlhttp://www.globeecologistics.com/crane_hiring.htmlhttp://www.globeecologistics.com/warehousing.htmlhttp://www.globeecologistics.com/warehousing.htmlhttp://www.globeecologistics.com/turnkey_logistics_contract.htmlhttp://www.globeecologistics.com/third_party.htmlhttp://www.globeecologistics.com/warehousing.htmlhttp://www.globeecologistics.com/heavy_odc_specialized.htmlhttp://www.globeecologistics.com/total_logistics_solution.html


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KTSPL Client List


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KTSPL ServicesNetwork


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Case Study

Others(KTSPL,TVS)

Gati

DHL

FED-EX

TransportCorporationof India LTD

Blue dartlogistics

AFL Logistics


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TVS Profile: Chennai-based Company A part of the TVS group In logistics business since 1995 Frost & Sullivan's 2005 Voice of Customer Award

In 2006, the company reported a turnover of Rs140 crore Target is to reach Rs 500 crore by 2007-08

TVS Logistics Services Ltd


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Various aspects of transportation

Warehousing Supply chain solutions

Vendors Management System

Value Added Services Overall capability

Services
http://www.globeecologistics.com/supply_chain.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/value_added_services.htmlhttp://www.globeecologistics.com/supply_chain.html


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The Fourth-Party Logistics service provider(4PL) or Lead Logistic Provider (LLP) is aBusiness Process Outsourcing (BPO)

provider.

Solution Integrator

Lead Logistic ProviderIndustry Innovator


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The services provided by a 4PL

provider are: Freight Negotiations with 3PLs

Freight Contract Management

Transport Billing Continuous Improvement Programs

Management of Service Providers

IT Solutions

Risk Management and Insurance Cash-flow Management.


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Fifth-party logistics

fifth-party logistics service i.e. the realisationof full-scale operation of e-procurement. Akey function of the 5PL is to aggregate the

demands of the 3PL into a bulky volume fornegotiating more favourable rates withairlines and shipping companies regardlessof which generation of logistics solution

belongs to all.
http://timesofindia.indiatimes.com/articleshow/2053859.cmshttp://timesofindia.indiatimes.com/articleshow/2053859.cmshttp://timesofindia.indiatimes.com/articleshow/2053859.cmshttp://timesofindia.indiatimes.com/articleshow/2053859.cms


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Sixth Party Logistics (6PL)

Sixth Party Logistics (6PL) to the

outsourcing of a manufacturing and

marketing for the organizations.


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Logistics is one of the area of the supply chain i.e.growing at a tremendous case as the Internet andE-Commerce is drastically changing the range,delivery time and the speed of information as well

as ordering and payment process. Due to the bigboon of information technology, greatly influencingand enhancing the effectiveness of logistics, thetime is not far when 5 PLs and 6 PLs may emerge

which will probably we doing part of themanufacturing and marketing for the

organizations.

CONCLUSION:


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ConclusionThe Indian 3PL market is set to grow tremendously in thenext 5-7 years, spearheading the growth of logisticsmarket. Several factors including governments support areinstrumental in this growth. Though certain challengesremain to be addressed, the general trend is highly

positive. With scenario highly favorable for them, the onusis now on 3PL service companies to offer quality servicesat affordable pricing, and delivering consistent results tomaintain the momentum. For now, surely 3PL is the way

forward for Indian Logistics Market.

References:
http://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.html


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References:-Ackerman, K. B. (1996). Pitfalls in logistics partnership. Internatinal Journal ofPhysical & Logistics Management, 26(3), 35-37Bhatnagar, R., Sohal, A. S., & Millen, R. (1999). Third party logistics services: aSingapore perspective. International Journal of Physical Distribution & Logistics

Management, 29(9), 569-587.

Dapiram, P., Lieb, R., Millen, R., & Sohal, A. (1996). Third party logistics servicesusage by large australian firms. International Journal of Physical Distribution &Logistics Management, 26(10), 36-45..

Rao, S. P., & Swarup,S. Business Intelligence and Logistics. White paper by Wiprotechnologies Available: http://www.wipro.com/shortcuts/downloads.htm

Sink, H., Langley, C.J., Gibson, B. J. (1996). Buyer observations of the US third-party logistics market. International Journal of Physical Distribution & LogisticsManagement, 26(3), 38-46.

Skjoett-Larsen, T. (2000). Third party logistics-from an inter organizational point ofview. International Journal of Physical Distribution & Logistics Management, 30(2),112-127.

Sum, C. & Teo, C. (1999). Strategic posture of logistics service providers inSingapore. International Journal of Physical Distribution & Logistics Management,29(9), 588-605.
http://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.html


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References:-Sengupta, Rika Transportation and Warehousing Facilities at

Gati, Harvard Business review, September,PP-82-84.

Alteler, Rahul., Supply Chain Management, Concepts andCases,2005,Prentice-Hall of India.Gati (www.gati.com/caogo_management.jspwww.kandarptraders.com/contact.htmwww.kandarptraders.com/areas_we_cover.htmwww.kandarptraders.com/third_party_logistics.htmwww.globeecologistics.com/clients.htmlwww.globeecologistics.com/mangements.htmlwww.globeecologistics.com/supply_chain.html

www.tvs.com/third _party logistic.hymlChopra, Sunil.,supply Chain Management Strategy, planning andoperation, 2002,person Education (Singapore) pvt. Ltd
http://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.globeecologistics.com/vendors_system.htmlhttp://www.gati.com/caogo_management.jsphttp://www.kandarptraders.com/contact.htmhttp://www.kandarptraders.com/areas_we_cover.htmhttp://www.kandarptraders.com/third_party_logistics.htmhttp://www.globeecologistics.com/clients.htmlhttp://www.globeecologistics.com/mangements.htmlhttp://www.globeecologistics.com/supply_chain.htmlhttp://www.tvs.com/third%20_party_logistic.hymlhttp://www.tvs.com/third%20_party_logistic.hymlhttp://www.globeecologistics.com/supply_chain.htmlhttp://www.globeecologistics.com/mangements.htmlhttp://www.globeecologistics.com/clients.htmlhttp://www.kandarptraders.com/third_party_logistics.htmhttp://www.kandarptraders.com/areas_we_cover.htmhttp://www.kandarptraders.com/contact.htmhttp://www.gati.com/caogo_management.jsp


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