Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
31 Cards in this Set
- Front
- Back
|
Logistics outsourcing relationships
|
A relationship between a shipper and an external organization that performs all or part the shipper’s logistics functions. This relationship has customized offerings, encompasses a broader number of service functions and is characterized by a longer-term, more mutually beneficial relation
|
|
|
Global 3PL Revenues
|
north America 187.6 bil Europe 174.4 bil asia pacific 269.6 bil latin America 41.9 bil other 77.2 total 750.7 |
|
|
increasing supply chain complexity
|
low cost country sourcing regulatory compliance offshoring and outsource mfg cost reductions focus on core competencies operational efficience need regional and local market experience expanding IT requirements |
|
|
Motivations for outsourcing logistics
|
Companies generally do not view logistics execution as a core activity. Outsourcing logistics execution enables them to focus on their core activities. 3PLs, by specializing in logistics execution, can benefit from economies of scale and focus. As a result, they can perform logistics activities better than their clients. |
|
|
The main objective of logistics management is to
|
manage product availability. Achieving this objective requires managing a wide range of activities that often have cross-functional as well as organizational boundaries.
|
|
|
planning long-term
|
Designing the logistics network • #, location, and capacity of facilities • Range of technologies used in these facilities |
|
|
planning short term |
• Production planning • Inventory planning • Transportation planning |
|
|
execution long term
|
Executing the design of the network • Set up facilities • Hire employees • Purchase and implement technology and equipment |
|
|
execution short term
|
• Produce goods according to plans • Manage the movement and storage of inventory according to plans • Manage transportation according to plans |
|
|
typical logistic outsourcing service
|
plan produce store and customize move return |
|
|
plan
|
Supply Chain Analysis & Design Supply Chain Management |
|
|
produce
|
Inbound to Manufacturing In-Plant Services Manufacturing Services |
|
|
store and customize
|
Warehousing & Order Fulfillment Secondary Packaging / Kitting & Assembly |
|
|
move
|
Transportation Management Home & Business Delivery |
|
|
return
|
reverse logistics
|
|
|
complexity level of service
|
1 integrated logistics service 2 basic logistics services 3 freight forwarding/ transit warehouse/ cross docking |
|
|
logistics services outsourced
|
domestictransportation warehousing international transportation freight forewarding |
|
|
shippers reported benefits of using 3PL
|
logistics cost reduction logistics fixed asset reduction inventory cost reduction average order cycle length order fill rate order fill accuracy |
|
|
reasons for not using 3PLs
|
Logistics is a core competency.Cost reductions would not be achieved.Logistics too important to outsource.Service level commitments would not be achieved.Corporate philosophy against outsourcing.We can do better than 3PL.Loss of control.Difficult to integrate IT systems with 3PLs systems.Security of shipments concerns.Lack of trust and inability to form meaningful relationship.Lack of global capabilities.Tried, but decided not to continue.
|
|
|
typical process for selecting a 3PL
|
Decision to outsource.Determine objectives and expectations.Develop a list of appropriate 3PLs.RFP or RFQCollect info about the 3PLs who are bidding.Choose 3PL based on the bids and info collected.
|
|
|
motivation for research |
To gain a better understanding of how changes in the global economy are affecting logistics operations back through the supply chain
|
|
|
methodology
|
Confidential, unstructured, open-ended interviews.Analyze across interviews looking for emerging themes. Theoretical sampling.Looking to achieve saturation.Secondary research conducted to look for confirmation of themes.
|
|
|
major business supply chain issues
|
Capacity issues are causing major challenges in most markets. Companies are looking for ways to get better at shipping smaller shipments of an increasing number of SKUs with shorter lead times.Companies are struggling with the lack of consistency across their customers in terms of delivery and packaging requirements.Companies are challenged by the dynamic nature of the customer requirements.
|
|
|
effects of economic downturn
|
Confirmation of smaller and more frequent orders in the mature markets (for most products) of North America and Europe. Trend not as prevalent in Asia and Latin America.Cash is king. Customers are striving to drive down inventory levels, but have higher delivery expectations due to potential stockout costs.Customers are looking for more points of differentiation. This is causing increased complexity for supplying companies who are also being asked to cut costs.
|
|
|
mature vs emerging markets
|
Clear confirmation of smaller and more frequent orders in mature markets of North America and Europe. Trend not as pronounced in Asia and Latin America. Emerging markets are seeing a shift in traditional trade to modern trade and this is taxing their logistics networks.Pace of growth in emerging markets is stress the supply chain’s ability to keep up. Infrastructure and talent are both issues.Some companies see their emerging markets as source of profits to offset the loses in the more mature markets.
|
|
|
expectations for 3PLs
|
Recognize retail trends through data mining and bring potential ways to mitigate any cost impacts of these trends. Help us get ahead of the curve.Bring us the cutting-edge knowledge in your focus areas from across the globe.Demonstrate an understanding of our culture and our priorities versus the other customers you are serving. Bring me more than just savings ideas. Show me how you can help drive top-line growth.
|
|
|
opportunities for 3PLs
|
Provide Customers with an Innovation AdvantageFocus on Network RedesignsSKU Rationalization vs Desire to DifferentiateForecasting of Requirements
|
|
|
building an innovation advantage
|
“The 3PL model is to do what you tell them to do, so what is their incentive to innovate? We have to build an incentive for them to innovate into the relationship or they are going to give us only what we ask for – nothing more.”
|
|
|
collaborative distribution
|
“The 3rd party is in a unique position to influence collaborative distribution. This is precisely one of the value-added ideas that they can provide by reaching out to companies we do not work with currently. They can facilitate activities that provide value for all three parties.”
|
|
|
collaborative distribution
|
“We worked with a non-compete and together shipped product to a retailer for a promotional event. To be very honest the only way we successful executed that was because we had a common 3PL between us that we leveraged. We wouldn’t have been able to do it without the common 3PL.”
|
|
|
3PL as an orchestrator
|
collaborator neutral arbitrator visibility standardization ------------------------- value creation |
