2. WHAT IS LOGISTICS AND SCM?
Logistics is used more broadly to refer to the process of coordinating
and moving resources – people, materials, inventory, and equipment –
from one location to storage at the desired destination. There are
inbound and outbound logistics.
Supply Chain Management has physical flow, information flow and
undertake overall process, flow of goods and services and includes all
processes that transform raw materials into final products.
3. WHAT IS 3rd PARTY LOGISTICS ?
The THIRD PARTY LOGISTICS is also called as 3PL or TPL.
Any firm involved in logistics and supply chain management activity use the
third party logistics company to outsource elements of SCM firm’s distribution,
warehousing, and the over all services.
They mainly involve in warehousing and transportation services, which could
be even customized according to the customer’s need, based on market
conditions and their demands for particular product.
5. TYPES OF 3PL:
WAREHOSUING: It is used for storing of goods by the manufacture, importer, exporter,
whole seller. They usually have loading docks to load and unload goods from trucks. Sometimes
warehouses are designed for the loading and unloading of goods directly from railways, airports,
or seaports.
TRANSPORTATION: Movement of goods, animals, humans from one location to another
location. There are many modes of transportations like roadways, railways, sea, airways and also
cable helping in import and export of product and services.
6. TYPES OF 3PL:
DISTRIBUTION: Distribution is the process of making a product or service available for
the consumer or business user who needs it. This can be done directly by the producer or service
provider, or using indirect channels with distributors or intermediaries.
SHIPPING AND RECEVIVING: They pack the goods in shipping containers, develop mailing
labels and shipping documents and ensure that all orders have been filled correctly. These
workers also verify incoming shipments by scanning barcodes to store that information into
computers. They may work in offices inside warehouses and manufacturing plants.
7. LEVELS OF OUTSOURCING IN 3PL:
• Based on transactions, with no long term contracts
and no bonding between the 3PL and the outsourcing
company.
Transactional
Outsourcing
• Outsourcing on a long term basis with negotiated
contacts and integrated IT systems to facilitate free
information flow and create supply chain visibility.
Tactical
Outsourcing:
• Based on long-term relationships with successful
outcomes, 3PL companies become partners in supply
chain management and establish transactional
transparency.
Strategic
Outsourcing:
8. PROS OF 3PL:
Scalability and feasibility
Resource network
Market expansion
Saves time and money by outsourcing
Continuous optimization
Leveraging specialized technology.
9. CONS OF 3PL:
Hidden responsibility
Steep set-up fees
Out of your hands
If the distance is more
Larger upfront investment
Lesser control over delivery process.
