This document discusses outsourcing logistics. It defines outsourced logistics and third-party logistics as using an external provider to handle supply chain functions like shipping, storing, packing and delivering goods. Third-party logistics providers specialize in integrating operations, warehousing, transportation services, cross-docking, inventory management, packaging and freight forwarding. Fourth-party logistics maintains a single point of contact by assessing, designing, building, running and measuring integrated supply chain solutions. The document compares third-party and fourth-party logistics and outlines six distribution network designs.

1. Unit –III
Out sourcing logistics
Out sourcing logistics: Reasons: Third party
logistics provider-fourth party logistics
providers - Stages –Role of Logistics
providers

2. Meaning of outsourcing logistics
• Outsourcing logistics is when a company uses an external
provider (aka a third-party) to handle various supply chain
functions.
• These can include a mix of shipping, storing, packing and/or
delivering a company’s physical goods, from raw materials
all the way to the finished product.
• The terms “outsourced logistics” and “third-party logistics”
are roughly interchangeable — they refer to the same thing.

4. Examples of outsourcing
Outsourcing's biggest advantages are time and
cost savings. A manufacturer of personal computers
might buy internal components for its machines from
other companies to save on production costs.

5. Advantages and Disadvantages of Logistics
Outsourcing

6. OUT SOURCING LOGISTICS REASONS

7. THIRD-PARTY LOGISTICS PROVIDER
A third party logistics company can store
your inventory for you. It will pick, pack, and
ship your products. 3PL is the vital link between
your manufacturing operations and your
customers.
When your order fulfilment operations run
smoothly, your customers are happy and your
business grows. It’s not an exaggeration to say

8. THIRD-PARTY LOGISTICS PROVIDER

9. THE THIRD-PARTY LOGISTICS PROCESS
When you outsource your fulfilment,
your products ship directly from the factory
to the 3rd-party logistics warehouse. Once
your inventory arrives, the third-party
logistics company can provide a range of
services.

10. Benefits of 3PL process

11. Third party logistics providers usually
specialise in
1.Integrating operations
2.Warehousing
3.Transportation services
4.Cross-docking
5.Inventory management
6.Packaging
7.Freight forwarding

12. Fourth Party
Logistics
Fourth Party Logistics, popularly known as 4PL,
is the outsourcing of logistics operations to a single
partner. The partner will be responsible for
assessing, designing, building, running and measuring
integrated supply chain solutions for the client. 4PL
maintains a single point of contact for its operations.

13. Fourth Party Logistics

14. Important aspects of 4PL
1. Add value relative to a firm managing its own
logistics providers.
2. Add growth in the supply chain surplus.
3. Facilitate the use of sophisticated information
technology.
4. Minimize production cost while meting delivery
schedules.
5. Coordinate firms supply chain and improve
relationship between the logistics providers.

15. Functions provided by a 4PL company
1.Procurement
2.Storage
3.Distribution
4.Processes

16. Comparison of 3PL and 4PL
S.No 3PL 4PL
1 Specialize in the operational
element of supply chain
management
Manages all the activities of
supply chain
2 Targets a single function Manages the whole process,
sometimes even the 3PL.
3 Major, activities included
warehousing, Transportation
and Packaging.
Major activities included
Consultancy, Storage,
Distribution and processes.
4 Focused on day to day
activities.
Focused on optimizing supply
chain.

17. There are six distribution network designs used to
move products from factory to consumer.
Manufacturer storage with direct shipping
Manufacturer storage with direct shipping and
in-transit merge
Distributor storage with carrier delivery
Distributor storage with last mile delivery
Distribution storage with customer pick up
Retail storage with customer pick up