3patry and 4 party logistics

TPL AND FPL

arun palanisamyI MBA, TNAU. 105/02/2023

CONTENTS

arun palanisamyI MBA, TNAU. 2

1.Logistics outsourcing

2. Third party logistics

3.fourth party logistics

4.Difference between the TPL and FPL.

05/02/2023


LOGISTICSLogistics is the management of the flow of goods between the

point of origin and the point of consumption in order to meet some

requirements.

information flow,

material handling,

production,

packaging,

inventory,

transportation,

warehousing, and often security05/02/2023


Logistics outsourcing involves a relationship between a company

and an LSP (logistic service provider), which, compared with basic

logistics services, has more customized offerings, encompasses a broad

number of service activities, is characterized by a long-term

orientation, and thus has a strategic nature

Logistics outsourcing

05/02/2023

Outsourcing - Industry TrendsFindings of a Survey : Why company's Outsource


Third-party logistics

(3PL) involves using external organizations to execute logistics

activities that have traditionally been performed within an organization

itself.


For example, if a company with its own warehousing facilities decides to employ external transportation, this would be an example of third-party logistics. 05/02/2023

The evolution of 3PL market is explained with reference to three distinct phases

In 1980's many transportation and warehousing firms developed into 3PL providers

( e.g. Exel Logistics and Frans Maas )

In the early 1990's firms that specialized in express parcel deliveries entered the markets

( e.g. DHL, TNT , UPS and FedEx )

In the late 1990's , companies originally specializing in financial services , I.T. services and management consulting entered the market by

developing competence in information systems and supply chain planning


Services Provided by 3PLsService Category

Basic Service Some specific value added services

Transportation Inbound, outbound by ship, truck, rail, air

Track/trace, mode conversion

Warehousing Storage, facilities management

Cross-dock, in-transit merge, inventory control

Information technology

Provide and maintain advanced information systems

Transportation management systems, warehousing management

Reverse logistics Handle reverse flows Recycling, customer returns, repair/refurbish

Other 3PL services

Customs brokering, hazardous material, order taking, consulting, port services, etc.

05/02/2023 10arun palanisamyI MBA, TNAU.

Services Provided By 3PL’s


TYPES OF 3PL PROVIDERSHertz and Alfredsson (2003) describe four

categories of 3PL providers

Standard 3PL Provider: this is the most basic form of a 3PL

provider.

pick and pack,

warehousing,

distribution


Service Developer: this type of 3PL provider will offer their customers advanced value-added services such as:

tracking and tracing

cross-docking

specific packaging

unique security system

Service Developer


This type of 3PL provider comes in at the request of the

customer and essentially takes over complete control of

the company's logistics activities.

The 3PL provider improves the logistics dramatically, but

does not develop a new service.

The Customer Adapter:


1. integrated logistics service provider

2. contract-based service provider

3. consulting service provider

3PL (or 3PL provider) has the following features at present


Asset-based - provider owns some assets, particularly transport-

related assets such as trucks, warehouses, etc.,

Non-asset-based -does not own such assets, and usually relies on

sub-contractors


3PL provider classified

05/02/2023

Buyers of 3PL ServicesCustomer # of 3PL’s Used

General Motors 37Wal-Mart Stores 33Ford Motor, HP 27Procter & Gamble 20General Electric 17Georgia Pacific, IBM 16PepsiCo, Sears 13Coca-Cola, Sara Lee, Target, Xerox 12

General Mills 11Delphi, Safeway 10

GREATER THE NUMER OF COMPONENTS INVOLVED IN MANUFACTURING MORE 3PL ACTIVITES WILL BE OUTSOURCED

Source : international logistics



Advantages and Disadvantages of 3PL

05/02/2023

The partnership between Ryder Dedicated Logistics and GM Saturn division is a good example of 3PL. Saturn focuses on automobile manufacturing and Ryder manages most of Saturn other logistics considerations. Ryder deals vendors, delivers parts to the Saturn factory and delivers finished vehicles to the dealers . Saturn Orders parts using Electronic Data Interchange ( EDI ) and sends same information to Ryder. Ryder makes all the necessary pickups from 300 different suppliers in the U.S., Canada and Mexico using special decision-support software to effectively plan routes to minimize transportation costs.


3PL example

05/02/2023

3PL is more complex than normal outsourcing of logistics activates

.When speaking of 3PL a true partnership condition is usually

assumed because

Strategic nature of services purchased

Buyer of 3PL realizes that synergies can be achieved by exploiting

the logistics provider distinct competencies

TPL vs OTHER ACTIVITIES


The concept of a fourth-party logistics (4PL) provider was first

defined by Andersen Consulting as an integrator that assembles the

resources, planning capabilities, and technology of its own

organization and other organizations to design, build, and run

comprehensive supply chain solutions.

fourth-party logistics (4PL)



4pl

05/02/2023

Synergy Plus operating model

Solution Integrator model

Industry Innovator model


4pl types

05/02/2023

1. Partnership between 4PL – 3PL to market supply chain solutions

2. Capabilities and market reach of both partners are combined

3. The 4PL provides:

Technology

supply chain strategy skills

capability to go to market

by program management expertise


Synergy Plus operating model

05/02/2023

Core Model: 4PL operates comprehensive supply chain

solutions for a single client.

Solution encompasses resources,

capabilities and

technology

of the 4PL with complementary service providers


Solution Integrator model

05/02/2023

4PL develops and runs a supply chain solution for multiple industry

players with focus on synchronization and collaboration

This model provides the greatest benefits, however it is complex and

a great challenge


Industry Innovator model

05/02/2023

Procurement Storage Distribution


Functions provided by a 4PL company

4pl providers

UPS,

CMA

CGM

05/02/2023


Reasons Why You Might Need a 4PL

1.Higher order-to-delivery cycle times, and order-to-cash cycles that are

increasing in length. Order-to-cash cycles affect other areas of the

company and can be one big area where improvement can free up

cash for important enterprise initiatives such as research and

development

2.The need and demand for IT resources. Lack of IT infrastructure to

support an expanding global supply chain can inhibit growth.

05/02/2023

3.Global growth, more inventory in more places, and a shifting revenue

recognition point. Companies often lack the ability to generate

substantive supply chain performance improvement on their own.

4.Global expansion. Companies wanting to get into markets they have

not been in before need flexible, effective supply chain processes to be

successful

SOURCE: Carl Fowler, senior director of operations, and leader of Menlo Logistics’ 4PL practice


Economies of Scale Reduced Supply Chain costs Increased flexibility Combines the advantages of in- and outsourcing Manufacturers can focus on core competencies Improved customer service Reduced capital requirements


Benefits of 4pl

05/02/2023

Loosing sight of original core-concept of SCM due to loss of

control

Customer relationships should not be dismissed on basis of

efficiency

Strict functional organization structure hinders integrated

Supply Chains

Resistance to change – the biggest obstacle to implementation

of new approaches


Problems of the 4PL Concept

05/02/2023

An example here would be a bicycle importer. The main function is to

import bicycles however, they need to have spare parts for these

unique bikes. A 4PL would manage the total logistic operations for

the spare parts business.


example

05/02/2023

Difference between 3PL and 4PL FPL differs from TPL in several respects

FPL organization is often a joint venture between a primary client

and one or more partners;

FPL organization acts as a single interface between the client and

multiple logistics service providers;

The major part, of the client's supply chain is outsourced to the FPL

organization.


ALL THE COMPANYS WOULD LIKE TO PROVIDE

AN BETTER THING IN BETTER MANNER TO

STABLIZE AND INCREASE THEIR EFFECTIVENESS

AND EFFECIENCY IN THIS COMPETITATIVE

WORLDarun palanisamyI MBA, TNAU. 37

CONCLUSION

05/02/2023

Thank u


The supply chain integration The raise of 4pl : gail dutton Third party logistics by C. John Langley Jr., Ph.D.

Logistics outsourcing and selection of third party logistics service provider (3pl), erdal çakir 2009.

Fourth party logistics a study of modern logistics Paulo Bragança 2009

http://www.cquential.co.za/industries/3pl-4pl/

REFERENCE

05/02/2023

3patry and 4 party logistics

Business