PPT - 4 PL 5PL
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Transcript of PPT - 4 PL 5PL
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Evolution of 4 PL / 5 PL Concepts in Logistics
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“Logistics is a Science, the scope of which is ever
expanding and quite soon it will expand to encompass
various business functions and will become the Prime
Driver of the business model of any organization”
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EVOLUTION
AND
IMPORTANCE
OF LOGISTICS
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VENDOR
INPUTS
PROCUREMENT VALUE ADDITION
PRODUCT
DISTRIBUTION
CUSTOMER
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TRADITIONAL TRANSPORTATION
MFG.ORG.
PLAN TRANSPORTACTIVITIES
PREPARESPECS.
CONTRACTING TRANSPORTER
WAREHOUSE
DISTRIBUTION
CUSTOMER
T/SLE
HIRE OF WAREHOUSE
APPOINT DISTRIBUTOR
PAYMENT
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3 PL CONCEPT
PLANDISTRIBUTION
PLANWAREHOUSING
PREPARESPECS
FOR 3PL
OWN PARTTRANSPORT
VEHICLES
DISTRIBUTOR
CUSTOMER
PLAN TOTALTRANSPORTOPERATIONS
MFG.ORG.
CONTRACTING
3 PL AGENCY
HIRE PARTTRANSPORT
VEHICLES
HIREWAREHOUSE
DELIVER TODISTRIBUTOR
ALL AS PER MFG.CO’SNEEDS &DESIGNS
PAYMENT
3 PLT/SLE
APPOINT DISTRIBUTOR
PAYMENT
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A 4 PL agency is retained by a manufacturing organization simply by stating its Logistics needs.
The role of a 4 PL agency is as follows:
A. Interacting with the marketing function to understand the desired availability of products at different geographical locations at different times.
B. Interacting with manufacturing function to understand the production scheduling.
C. Depending on A & B, defining the shipment size.
D. Hiring of godowns (Bonded or otherwise) at different geographical locations.
E. Planning and establishing the logistics hubs which are large and modern warehouses.
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F. Hiring the services of 3PL agencies.
G. Hiring of “Freight Forwarders” and “Custom House Agents” in cases of exports and imports.
H. Hiring the services of IT software agencies to develop the appropriate software. Also hiring or owning, IT hardware for inter connecting all hubs, godowns, marketing and manufacturing.
I. Understand the transport/handling needs within the premises of the manufacturing organization and outsourcing these to small transporters.
J. Doing all the above for multiple clients to reduce the cost to individual manufacturing organizations.
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Very often, the 4 PL agency also offers the following services to the manufacturing client:
i. Repacking.
ii. Relabelling.
iii. Bar Coding.
iv. Quality Assurance.
v. Invoicing.
vi. Collection of dues.
vii. Insurance Coverage.
viii. Customer Relations Management (CRM).
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4 PL CONCEPT
MFG.ORG.
SPELL OUT LOGISTICSNEEDS INCLUDING
TRANSPORT WITHINMFG.CO’S FACTORY
4 PL
CONTRACT WITHMFG.CO.
PREPARE 4PL’SOWN SPECS.
PLANTRANSPORTATION
IDENTIFY 3 PLPLAN
WAREHOUSINGPLAN
DISTRIBUTIONPLAN INFO
FLOW
CUSTOMER ORDERFULFILMENT
DESIGN
T/SLE
3 PL
OWN PARTTRANSPORT
VEHICLESHIRE PART
TRANSPORTVEHICLES
HIREWAREHOUSE
DELIVER TODISTRIBUTOR
ALL AS PERSPECS DRAWNBY 4 PL
DISTRIBUTOR
CUSTOMERPAYMENT
HIRE DISTRIBUTOR
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REPACKING
RELABELLING
BARCODING
QUALITY ASSURANCE
INVOICING
COLLECTION OF DUES
INSURANCE
FUTURE SEVICES OF 4 PL
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The 4PLs are thus basically specialised consulting organisations not owning large resources but having a
focused team of experts.
Even the interaction with 5 PLs would be done by 4PLs.
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5 PL1. TRANSPORTATION:-
Courier, Air, Rail, Road, Inland Waterways, Ocean or Multi-modal
- Service provider details
- Services offered
- Market rates
- Different routes
- Transshipment points
- Transit times
- Insurance coverages
- Imbalance of containers
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5 PL cont…
2. TECHNOLOGY:-
- Global positioning system
- Swipe card system
- Bar coding
- Packaging
3. IT:-
- Specialised softwares (e.g.. Fleet Management)
- Tailor-made softwares
4. STATUTORY INFORMATION:-
- Road permits
- Central Govt./ State Govt. taxation
- Overloading rules
- Pollution control rules
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5 PL cont…
5. REFERENCE DOCUMENTS:-
- Cabotage laws
- Service tax manuals
- Concor manuals
- ICD/ CFS manuals
6. All other information regarding host of related subjects:-
- Banking and bill discounting
- Financing
- Warehousing
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Thus we can say that a 4PL agency is responsible for effective management of the whole value chain of
the organisation.
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Today in India, the 3 PL concept is getting established, the 4 PL agencies are just coming up and 5 PLs are
on the horizon.
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CONTINUOUS
IMPROVEMENT
IN
LOGISTICS
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i. Marketing
ii. Information Technology
iii. Capital Expenditure
iv. Manufacturing
v. Human Resources Management
vi. Finance & Accounting
vii. Sourcing & Procurement
viii. Product Development
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e-logistics is the process, carried out over digital media for planning/implementing/controlling/monitoring effective
flow of input materials, work-in-progress (WIP), inventory and finished goods from the point of origin to the point of
consumption for the purpose of fulfilling the requirements of customers AND suppliers.
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e-LOGISTICS
SUPPLIER INBOUNDTRANSPORT
MFG.PROCESS
OUTBOUNDTRANSPORT
WAREHOUSING 2nd LEGTRANSPORT
CUSTOMER AFTER SALES SPARES
PROCUREMENT
VALUE ADDITION
INVENTORYCONTROL &DISTRIBUTION
C R M
FLOW OF MATERIALS
FLOW OF FUNDS
MARGINS
FLOW OF INFORMATION
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VALUE CHAIN
MFG. ORGANISATION
SUPPLIERS
CUSTOMERS
VALUEADDITION
SUPPLIERS
CUSTOMERS
TIER-1SUPPLIER
TIER-2SUPPLIER
TIER-3SUPPLIER
TIER-1CUSTOMER
TIER-2 CUSTOMER
TIER-3CUSTOMER
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e-BUSINESS VIS-À-VIS LOGISTICS:
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e - BUSINESSMFG.CO.
SELLER
BUYER
CUSTOMER
PAYMENT
e-MARKET PLACE
e-CRM
ALLIANCE WITH A4 PL PROVIDER 4 PL SERVICES
• e-CATALOGUE
• SPECIFICATIONS
• MODEL NOS.
• TECH DETAILS
• PRICES
• EXPECTED DELIVERY
e-CRM
DELIVERY OF GOODS
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LEAN MANUFACTURING VIS-À-VIS LOGISTICS
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PACKAGING-- AN IMPORTANT PART OF LOGISTICS:- Standardisation of sizes
- Standardisation of packaging materials
- Reuse
- Reverse logistics
- Disposal
- Over packing
- Under packing
- Standardisation of specifications:. Bursting strength. GSM of paper. Quality of paper. Ply details. Printing details
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e-MARKET PLACES AND THEIR DEPENDENCE
ON
LOGISTICS
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OUTSOURCING OF PROCUREMENT FUNCTION
VIS-À-VIS
LOGISTICS
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MULTIMODAL LOGISTICS
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OCEAN FREIGHT
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OCEAN TRANSPORTATION (End to End Operation)
CONTAINER’STRANSPORT (FULL) CONTAINER
STUFFING OFCONTAINER
FREIGHTFORWARDER
FCLCONSOLIDATE
TOFCL,IF REQD.
SHIPPINGLINE
SHIPPING LINE
AGENT
CONTAINERPARKING
YARD
CONTAINER TRANSPORT (EMPTY)
EXPORTER
CUSTOMHOUSEAGENT
B/LEXPORT
DOCUMENTATIONCUSTOMS
CLEARANCE
B/L TOBANK
BANK
PAYMENT
SHIP
SHIPPED ONBOARD ADVICE
OCEANSHIPMENT
ALL PREVIOUSACTIVITIES
INREVERSE
ORDER
OVERSEASCUSTOMER
OVERSEAS PARTINDIAN PART
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THE ROLE OF FREIGHT FORWARDERS
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THE ROLE OF THE CUSTOM HOUSE AGENTS
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AIR FREIGHT
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RAIL FREIGHT:- Own rakes
- Freight express
- CONCOR
- Subsidies (Passenger Vs Freight)
- Classifications/ Codification
- Industry feedback & Rly. budget
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ROAD FREIGHT:
- Cost models (Rs / t / Km)
- Seasonality
- Sensitivity to fuel rates
- Sensitivity to backhaul
- Sensitivity to bonus/penalty
- Large capacity modern vehicles -- limitations
- ODCs
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ROAD FREIGHT
JAN JULY DEC
FREIGHT
ANNUALRATE
MONTH
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WAREHOUSING:
- Storage should be minimum
- Shared facilities
- Segmentation & placements
- Computer operated hoists
- IT linkages and softwares
- Fire fighting facilities
- Ventilation facilities
- A.C. facilities
- Handling facilities
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“Logistics is a Science, the scope of which is ever
expanding and quite soon it will expand to encompass
various business functions and will become the Prime
Driver of the business model of any organization”