hange Management and Organizational Leadership--Logistics Outsourcing

1

The Pennsylvania State University

Smeal College of Business

Logistics Outsourcing Fundamentals

SCM 860

Dr. John Langley

2

Key Topics

 Role and Importance of Logistics Outsourcing

 Types of Logistics Outsourcing

 Example Major Providers of 3PL Services

 Rationale for Outsourcing?

 Annual Global 3PL Study

 Key Issues

 Critical Questions to Ask/Answer About Providers and Users

3

Logistics Service Providers:

Facilitators of Global Trade

 Freight Forwarders

 Rail & Air Cargo Transport

 Warehousing & Contract Logistics Companies

 Container Shipping Lines

 Trucking Companies

 Courier Express & Parcel Companies

4

3PLs providing value-added transportation management services

dealing with shipments originating in and destined to North American

points. Services are usually performed in conjunction with freight

brokerage and are often contractual.

 C. H. Robinson Worldwide, Eden Prairie, MN

 Transplace, Frisco, TX

 BNSF Logistics, Springdale, AR

3PLs providing value-added international transportation

management services dealing with shipments originating in or

destined to North American points usually performed in conjunction

with freight forwarding, often contractual.

 Expeditors International of Washington, Seattle, WA

 UPS Supply Chain Solutions, Atlanta, GA

 XPO Logistics, Greenwich, CT

Four Major 3PL Segments – Armstrong & Associates

Adapted from Armstrong & Associates.

1.

Non-Asset

Based

Domestic

Transportation

Management

2.

Non-Asset

Based

International

Transportation

Management

5

Four Major 3PL Segments – Armstrong & Associates

Adapted from Armstrong & Associates.

3.

Asset -Based

Domestic

Transportation

Management

4.

Asset-Based

Value-Added

Warehousing &

Distribution

3PLs providing dedicated contract carriage services supplying

tractors, drivers, and management. Trailers normally included;

contract terms 1-7 years.

 Penske Logistics, Reading, PA

 Ryder Dedicated, Miami, FL

 Werner Dedicated, Omaha, NE

3PLs normally providing long-term contract warehousing or

distribution center operations with a host of value-adds.

 FedEx Supply Chain, Genco ATC, Pittsburgh, PA

 Menlo Worldwide, San Mateo, CA

 DHL Supply Chain, Westerville, OH

6

Example Major Providers of 3PL Services

7

Rationale for Outsourcing:

Need Understanding of Corporate Core Competencies

8

Annual 3PL Study – Penn State University

Major Research Thrusts

www.3plstudy.com

Paris

New York

Berlin

Shanghai

Customer And Provider Survey

E-Mail Survey Global Respondents Major Industry Verticals

Special Topics

Focus Interviews Key Industry Experts

Facilitated Discussions

3PL Workshops Global Locations

Singapore Utrecht

Chicago Hong Kong

Amsterdam

London

San Francisco

9

 Activities Outsourced

 Impact of Economic Volatility

 Critical Importance of

Information Technology

 Emerging Markets

 Evolution of Customer-3PL

Relationships

Some Key Issues for the Outsourced Logistics Sector

10

Some Critical Questions for 3PLs and Customers

 Business culture, attitudes,

and values?

 Elements of your “services

portfolio”?

 IT capabilities?

 Onboarding and project

management capabilities?

 Overall relationship

management?

 “Vision” about supply chain

management and logistics

outsourcing?

 Internal organization to manage

3PLs?

 Internal processes to help

manage 3PL relationships?

 Do customers look to their 3PLs

for supply chain advice?

Customers to Ask of 3PLs 3PLs to Ask of Customers

11

Thank You !!!

For further Information:

[email protected]