Third Party Logistics Providers (3PL)OverviewTypes of 3PL ProvidersSlide 4Types of 3PL ProvidersSlide 6Slide 7Logistics?Why Use 3PL’s?Why Use Cont.Management FocusLevels of Outsourcing3PL DefinedAs a Manager… Which 3PL Provider Do I Choose?How is a 3PL Differentiated From a Transportation Provider?Successful Implementation of 3PLTips for Successful ImplementationTips Continued…Slide 194PL ProvidersTransways Express 4PLQuestions?SourcesThird Party Logistics Providers (3PL)Kyle Sera Amy Irvine Scott AndrewCarrie SchmidtRyan LancasterOverviewWhat are 3PL’sWhy use themTips for implementation of 3PL’s4PL’sTypes of 3PL ProvidersTransportation BasedServices extend beyond transportation to offer a comprehensive set of logistics offerings. Leveraged 3PLs use assets of other firms. Non-leveraged 3PLs use assets belonging solely to the parent firm. Examples: Ryder, Schneider Logistics, FedEx Logistics, UPS LogisticsTypes of 3PL ProvidersWarehouse/Distribution BasedMany have former warehouse and/or distribution experience. Examples: DSC Logistics, USCO, Exel, Caterpillar Logistics, IBMTypes of 3PL ProvidersForwarder BasedVery independent middlemen with forwarder roles. Non-asset owners that provide a wide range of logistics services. Examples: AEI, Kuehne & Nagle, Fritz, Circle, C. H. Robinson, Hub GroupTypes of 3PL ProvidersFinancial BasedProvide freight payment and auditing, cost accounting and control, and tools for monitoring, booking, tracking, tracing, and managing inventory. Examples: Cass Information Systems, CTC, GE Information Services, FleetBostonInformation BasedSignificant growth and development in this category of Internet-based, business-to-business, electronic markets for transportation and logistics services. Examples: Transplace, NistevoTypes of 3PL ProvidersLogistics?Logistics: Managing the flow of information and goods inbound from suppliers and outbound to customers.Why be good at this?Core competency?Why Use 3PL’s?Save timeDon’t need to invest in:TrucksTrainingDevelopmentHelp expandNew marketsInternationalNo roadsWhy Use Cont.Narrow your focusAllows you to focus on your strengthsDon’t get spread too thinReach more customers more effectivelyCan ensure delivery timescan help a company run leanerManagement FocusFurthering your companyConsider potential benefits and drawbacks3pl’s can increase profitabilityCan you be a 3PL to someone else?Levels of OutsourcingTransactional Outsourcing: Based on transactions, with no long term contracts and no bonding between the 3PL and the outsourcing company. Tactical Outsourcing: Outsourcing on a long term basis with negotiated contacts and integrated IT systems to facilitate free information flow and create supply chain visibility. Strategic Outsourcing: Based on long-term relationships with successful outcomes, 3PL companies become partners in supply chain management and establish transactional transparency.3PL DefinedCan be ambiguous as there are many definitionsSome say “all or a significant part”Some say “at least one part”Best definition is probably a combination:Businesses that provide one or many of the following logistics services:Transportation ManagementPublic/Contract WarehousingDistribution ManagementFreight ConsolidationAs a Manager…Which 3PL Provider Do I Choose?Inbound Logistics recognizes top 10Uses its readers to conduct voteOver 300 companies nominated with 3,000+ votesTop 3 this year:1) UPS Supply Chain Solutions2) Schneider Logistics3) C.H. RobinsonHow is a 3PL Differentiated From a Transportation Provider?Transportation provider gets product from point A to point BCould be considered a 3PLJust one function of logistics3PL provider assists in multiple functionsSuccessful Implementation of 3PL Why you want to select the right provider the first timeOnly about 65% of companies believe their provider is doing a “good” job.55% of logistics outsourcing contracts end in 3-5 yearsThe source had a list of 14 key tips for success, but we are going to focus on the 5 most important issues.Tips for Successful Implementation1) Have an outsourcing strategy.Know what your outsourcing strategy is. It needs to be well thought out and measured against in house solutions and capabilities.SWOT analysis. As a company you should understand the strengths, weaknesses, opportunities and threats of outsourcing logistics, rather than keeping them in house.2) Do your homework.Do a comprehensive studyClearly document advantages, challenges, costs and benefits.Document expectationsSet down expectations in clear terms and include current costs.Tips Continued…Create a robust selection process.Invite companies in to give a formal presentation without giving requirements. This can help document their strengths and weaknesses.Make a site visit to the 3PL, and talk with its existing customer.3) Measure and review performanceHave a efficient and accurate measurement system.Qualitative measures that focus on effectiveness and quantitative measures that focus on efficient utilization.Have an efficient costing systemThis will help you to understand the costs involved in outsourcing.“Are we making money doing this?”Tips Continued…4) Create an Implementation StrategyCreate a project plan road mapBe clear who does what, create a project management team with members from both organizations and review progress vs. planned milestones.5) Nurture the RelationshipBoth Parties must nurture the relationship to make outsourcing successful.Create mutual trust, respect and a sense of integrity.4PL ProvidersManage and direct the activities of multiple 3PLs, serving as an integratorRefinement on the idea of 3PLs4PLs are not asset based like 3PLsAssembles and manages the resources, capabilities, and technology of its own organization and other organizations to design, build and run comprehensive supply chain solutionsTransways Express 4PLOne stop transport and logistics supplierWork with suppliers and customersQuestions?Sources3PL definition:http://accuracybook.com/glossary.htmTop 10 3PL providers:http://www.inboundlogistics.com/3pl/awards.shtmlSuccessful 3PL