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Third Party Logistics
Anwar Mohamed

31 October 2008
Definitions
• Third Party Logistics (3PL): Outsourcing all or much of a
companies logistics operations to a specialized co...
How to works…

Your Enterprise

Customer

3PL Provider
SIZE AND SCOPE
•
•
•
•

Contributes well over 5% of the GDP National Statistics,2006
5th Largest Industry in the UK Prospe...
WHY OUTSOURCE?
•
•
•
•
•

Cost & Time effectiveness
Freeing resources
Technical expertise
Asset Reduction
Focus on corpora...
% of 3PL Providers Used
70

60

50

40

N. America
W.Europe
Asia

30

20

10

0
2001

2002

2003

Source: Focus 06

2004
Globalization
• 80% of the top 200 UK companies operate on a
global scale
POLAND
U.K.

MINNEAPOLIS, MINN.

FRANCE

NEW YOR...
Top Ten 3PL’s Customers
Industry
Global

Global
Costs

Domestic
Costs

Automotive
Technology
Retailing
Consumer Products
F...
Clients of 3PL Providers
Services Provided By 3PL’s

Lead Logistics
4%
Integrated
9%

Other
5%

Transportation
Mgt
21%

International
9%
Private Fl...
Top 3PL Providers

Est. Rev. (£M)

Rank (2003)

Provider

Revenue

1

Excel

£8,300

2

Kuehne & Nagel

£6,900

3

Schenke...
For a Successful 3PL

• Develop an Outsource Strategy
• Measure Performance
• Create a Project Plan / Road
Map
Source
•
•
•
•
•
•

3PL definition:
http://accuracybook.com/glossary.htm
Top 10 3PL providers:
http://www.inboundlogistics...
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Third-party logistics

  1. 1. Third Party Logistics Anwar Mohamed 31 October 2008
  2. 2. Definitions • Third Party Logistics (3PL): Outsourcing all or much of a companies logistics operations to a specialized company. • Third Party Logistics Provider: A firm which provides multiple logistics services for use by customers. Preferably, these services are integrated or “bundled” together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers and finished products from manufacturers to distributors and retailers. Among the services which they provide are transportation, warehousing, cross-docking, inventory management, packaging and freight forwarding. Source: Council of Logistics Management
  3. 3. How to works… Your Enterprise Customer 3PL Provider
  4. 4. SIZE AND SCOPE • • • • Contributes well over 5% of the GDP National Statistics,2006 5th Largest Industry in the UK Prospects,2006 Employs over 1.7 million people Skills for Logistics , 2006 Involves with over 65000 organisations Insidecareers,2006
  5. 5. WHY OUTSOURCE? • • • • • Cost & Time effectiveness Freeing resources Technical expertise Asset Reduction Focus on corporate core competitiveness
  6. 6. % of 3PL Providers Used 70 60 50 40 N. America W.Europe Asia 30 20 10 0 2001 2002 2003 Source: Focus 06 2004
  7. 7. Globalization • 80% of the top 200 UK companies operate on a global scale POLAND U.K. MINNEAPOLIS, MINN. FRANCE NEW YORK, NY HAYWARDUS CAL. Hayward PORTUGAL BAHRAIN SPAIN GUADALAJARA, MEXICO GUATEMALA HONDURA S LAHORE, KARACHI, PAKISTAN PAKISTAN MEXICO CITY, MEXICO LOS ANGELES, CAL. KOREA MILAN, ITALY FLORENCE, ITALY TURKEY BOMBAY, INDIA NEW DELHI, INDIA EGYPT BANGALORE, INDIA MADRAS, JORDAN INDIA DUBAI SRI LANKA DHAKA, BANGLADESH TIANJIN, CHINA QINGDAO, CHINA DONGGUAN, CHINA SHANGHAI, CHINA GUANGZHOU, SHENZHEN, CHINA CHINA TAIWAN ISRAEL DOM. REPUBLIC EL SALVADOR BRAZIL NICARAGUA VIETNAM THAILAND CHITTAGONG, BANGLADESH Madagascar MALAYSIA KENYA HONG KONG PHILIPPINE S SAIPAN SINGAPOR E INDONESIA FIJ I MAURITIUS LESOTHO SWAZILAN D DURBAN LEGEND MERCHANDISING & PRODUCTION SERVICES PRODUCTION SERVICES
  8. 8. Top Ten 3PL’s Customers Industry Global Global Costs Domestic Costs Automotive Technology Retailing Consumer Products Food and Grocery Healthcare Metal Industry Other $98.2 $156.4 $98.6 $13.6 $32.2 $38.4 $179.7 $63 $37.4 $77.4 $67.2 $13.3 $27.8 $34.0 $84 $25.3 Costs stated in Billion's of Dollars Total Costs $678.3 $366.3
  9. 9. Clients of 3PL Providers
  10. 10. Services Provided By 3PL’s Lead Logistics 4% Integrated 9% Other 5% Transportation Mgt 21% International 9% Private Fleets 7% Intermodal 4% Value Added 20% Warehousing 21% Source: Armstrong and Assoc 2004
  11. 11. Top 3PL Providers Est. Rev. (£M) Rank (2003) Provider Revenue 1 Excel £8,300 2 Kuehne & Nagel £6,900 3 Schenker £6,400 4 DHL £5,700 5 P&O Nedlloyd £4,800
  12. 12. For a Successful 3PL • Develop an Outsource Strategy • Measure Performance • Create a Project Plan / Road Map
  13. 13. Source • • • • • • 3PL definition: http://accuracybook.com/glossary.htm Top 10 3PL providers: http://www.inboundlogistics.com/3pl/awards.shtml Successful 3PL implementation: http://logistics.about.com/od/thirdparty/a/uc041805a.htm Sangam, VK. (2006). Implementing Third Party Logistics. Retrieved May 5th, 2006. From Massey University, About Business and Finance website: http://logistics.about.com/od/thirdparty/a/uc041805a.htm Red Prairie: http://www.redprairie.com/Industry%20Solutions/Third%20Party%20Logistics.aspx Class lecture slides: http://logistics.about.com/od/thirdparty/a/uc041805.htm • CILT uk • Logistics and Transport Focus Magazines

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