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Third Party Logistics

Third Party Logistics. Libby Ogard Prime Focus LLC October 20, 2004. Definitions. Third Party Logistics (3PL): Outsourcing all or much of a companies logistics operations to a specialized company

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Third Party Logistics

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  1. Third Party Logistics Libby Ogard Prime Focus LLC October 20, 2004

  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. POLAND KOREA MILAN, ITALY U.K. MINNEAPOLIS, MINN. TIANJIN, CHINA FLORENCE, ITALY FRANCE QINGDAO, CHINA NEW YORK, NY TURKEY HAYWARD CAL. US - Hayward PORTUGAL DONGGUAN, CHINA BAHRAIN LAHORE, PAKISTAN SHANGHAI, CHINA SPAIN KARACHI, PAKISTAN LOS ANGELES, CAL. MEXICO CITY, MEXICO GUANGZHOU, CHINA SHENZHEN, CHINA BOMBAY, INDIA NEW DELHI, INDIA DOM. REPUBLIC BRAZIL TAIWAN GUADALAJARA, MEXICO EGYPT GUATEMALA HONG KONG BANGALORE, INDIA DUBAI DURBAN LESOTHO Madagascar KENYA JORDAN ISRAEL PHILIPPINES HONDURAS EL SALVADOR MADRAS, INDIA SAIPAN VIETNAM NICARAGUA SRI LANKA THAILAND DHAKA, BANGLADESH SINGAPORE CHITTAGONG, BANGLADESH F I J I MALAYSIA MAURITIUS INDONESIA SWAZILAND LEGEND MERCHANDISING & PRODUCTION SERVICES PRODUCTION SERVICES Why Outsource? • 80% of the top 400 US companies operate on a global scale

  4. Complex Inland Distribution Patterns

  5. Profitability depends on Speed, Reliability and Visibility

  6. Outsourcing - Industry Trends

  7. Description Savings Realized 10-15% 15% 10-15% 5-10% 4-5% 20-25% 10-15% 10-12% 7-10% Route Design & Optimization Closed Loop Dedicated Operations Mode Conversion Core Carrier Management Rate Negotiation & Audit Inbound Consolidation Reverse Logistics DC Location Realignments Reduced Inventory Outsourcing - Industry Trends Contract Logistics Savings Potential

  8. FY 2003 Fortune 500 Global 3PL Gross Revenues by Industry

  9. Customers of 3PL’s Costs stated in Billion's of Dollars

  10. Customers of 3PL’s Percent of Fortune 500 Companies Using 3PL’s Armstrong and Associates 2004

  11. Buyers of 3PL Services

  12. Services Provided By 3PL’s Source: Armstrong and Assoc 2004

  13. Top Providers Est. Rev. ($M)

  14. 10 Commandments of Outsourcing • Develop a strategy for outsourcing • Establish a rigorous provider selection process • Clearly define expectations • Develop a good contract • Establish sound policies and procedures • Identify and avoid potential points of friction • Communicate effectively with your partner • Measure performance and communicate results • Motivate and reward provider • Be a good Partner

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