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MID-TERM REVIEW
DARSHAN KARIA
11BIE019
OVERVIEW/SEMINAR COVERAGE
INTRODUCTION
DEFINITION
EVOLUTION OF TPL
FOURTH PARTY LOGISTICS
PERFORMANCE.
OVERVIEW/SEMINAR COVERAGE
ADVANTAGES AND DISADVANTAGES
OF A TPL
IMPLEMENTATION
INTRODUCTION
DEFINITION
(Maloni and Carter, 2006). Third-party logistics was initially defined as the
use of external companies to perform logistics functions that have traditionally
been performed within an organization.
Generally referred to as TPL/3PL.
EVOLUTION
Initially started with basic logistic activities
Logistic owners collaborated started owning warehouses
Introduction of Information technology
OPERATIONS
Transportation
Warehousing
Information technology
Reverse logistics
Special skills/handling
4PL
MANAGES
3PL BROKERS,
SUPPLIERS, ETC
There is a however a very little distinction left between a 3PL & 4PL
Essentially taking complete responsibility for the customer
OUTSOURCING DECISIONS
OUTSOURCING: The process in which a firm hires an outside firm to
conducting operations .
Q.1 Will the third party increase the supply chain surplus relative
to performing the activity in house ?
Q.2 To what extent do risks grow upon outsourcing ?
FACTORS
AFFECTING
SURPLUS
SCALE
UNCERTAINITTY
SPECIFICITY OF
ASSETS
Capacity aggregation
Inventory aggregation
Transportation aggregation by transportation intermediaries
Warehousing aggregation
Procurement aggregation
Information aggregation
Relationship aggregation
Lower cost and higher quality
RISKS
The process is broken
power
Leakage of sensitive data and info.
Ineffective contracts
DECISION
A firm gains the most by outsourcing to a third party if its needs are
small, highly uncertain, and shared by other firm outsourcing form the
same third party.
Specificity of assets involved in
function Low
High
Firm scale
Demand
uncertainty
Low
High growth
in surplus
Low-medium
growth in
surplus
High
Low growth
No growth
Low
Low-medium
growth
Low growth
High
High growth
Low medium
growth
ADVANTAGES
Cost and time savings for the client
REFERENCES
Supply Chain Management by Sunil Chopra and Peter Meindl
Paper: What drives the choice of a third party logistic provider? By edward
Anderson
Third party logistics study Campgemini