PPT on SCM

1. Vinay Kenkere
Faculty
Department of Commerce and Management

2. Outsourcing
 Outsourcing can replace entire purchasing,
information systems, marketing, finance, and
operations department
 Applicable to firms throughout the world
 Making the right decision may be the
difference between success and failure

3.  Outsourcing has become a major strategy as
firms move toward specialization
 Increasing expertise
 Reduced cost of reliable transportation
 Rapid deployment of telecommunications
and computers
– the Internet

4. Steps involved in Selection
• Six step process for forming and sustaining
supply chain relationships:
– Step One – Perform strategic assessment
– Step Two – Decision to form relationship
– Step Three – Evaluate alternatives
– Step Four – Select partners
– Step Five – Structure operating model
– Step Six – Implementation and continuous
improvement

5. Diagram Representation

6. Core
Competency
Best in the world at
electromechanical
miniaturization design
Services
Post-sales
service
Logistics
Distribution
Accounting
Maintenance
Real estate
management
Marketing
Parts
manufacture
Financial
functions
Employee
benefit
management

7. What research Says
Cost savings 77%
Gaining outside expertise 70%
Improving services 61%
Focusing on core competencies 59%
Gaining access to technology 56%

8. Advantages
• Cost and time savings for the client
• Low capital commitment
• Ability of client to focus on core business
• flexibility
• Expertise

9. 3PL
• 3PL is defined as "a firm that provides multiple
logistics services for use by customers. Preferably,
these services are integrated, or bundled
together, by the provider. Among the services
3PLs provide are transportation,
warehousing, cross-docking, inventory
management, packaging, and freight forwarding."

10. Types of 3PL providers
Standard 3PL Provider:
this is the most basic form of a 3PL provider.
They would perform activities such as, pick
and pack, warehousing, and distribution
(business) – the most basic functions of
logistics. For a majority of these firms, the 3PL
function is not their main activity.

11. • Service Developer:
This type of 3PL provider will offer their
customers advanced value-added services
such as: tracking and tracing, cross-docking,
specific packaging, or providing a unique
security system. A solid IT foundation and a
focus on economies of scale and scope will
enable this type of 3PL provider to perform
these types of tasks.

12. • The Customer Adapter:
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 base for
this type of 3PL provider is typically quite
small.

13. • The Customer Developer:
This is the highest level that a 3PL provider can
attain with respect to its processes and
activities. This occurs when the 3PL provider
integrates itself with the customer and takes
over their entire logistics function. These
providers will have few customers, but will
perform extensive and detailed tasks for them

14. Fourth party logistics provider/ 4PL
• A fourth party logistics provider has no own transport
assets or warehouse capacity.
• They have an alocative and integration function within
a supply chain with the aim of increasing the efficiency
of it.
• The idea of a fourth-party logistics provider was born in
the seventies by the consulting company Accenture.
• Firms are outsourcing their selection of third party
logistics provider and the optimization process of the
integration of these to a PL as an intermediary.