Third Party Logistics (3PL)

1
Third Party Logistics (3PL)

• Chapter 3

2
Outsourcing fulfils 2 needs

• It improves service levels by improving
  flexibility and inventory management
• It reduces costs in various ways

3
Services of 3pl

1. Basic services
2. Physical contract logistics services
3. Management contract logistics services
4. Integrated contract logistics

4
Using 3pl providers can allow

• To penetrate new markets
• Reduce the inherent financial investment risks
  like owning trailers and warehouses
• Coordinate producers and distributors within a
  global approach
• Access new technologies, sophisticated
  warehousing operations or new delivery options

5
Risks associated

• Strategic risk
• Commercial risk
• Management risk

6
Benefits from 3pl services

• Lower cost
• Improved expertise
• Market knowledge and data access
• Improved operational efficiency
• Improved customer service
• Ability to focus on core business
• Greater flexibility

7
Decision before allocation

1. Company needs(is logistics a core competence?)
2. Tangible values (are there any measurable
   advantages?)
3. Management commitment
4. Provider capabilities

8
Queries?