logistics student

1. Third Party Logistics
Anwar Mohamed
31 October 2008

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. How to works…
Your Enterprise
Customer
3PL Provider

4. SIZE AND SCOPE
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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. WHY OUTSOURCE?
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Cost & Time effectiveness
Freeing resources
Technical expertise
Asset Reduction
Focus on corporate core
competitiveness

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. 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. 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. Clients of 3PL Providers

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. 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. For a Successful 3PL
• Develop an Outsource Strategy
• Measure Performance
• Create a Project Plan / Road
Map

13. Source
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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
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CILT uk
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Logistics and Transport Focus Magazines