TBS 908

3PL-An Efficient Solution for Problems Associated with Transportation

Presented By Deepu Venugopal (3913545)

Under the guidance of DR.BALAN SUNDARAKANI

SUBJECT: Supply Chain Management (TBS 908) DATE: 07-12-2010

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Table of Contents
1. Executive Summary...................................................................................................3 2. Introduction.3 3. Problem Identified and Solution.4 4. Different Logistics Providers.4 5. Third Party Logistics5 6. Definition6 7. Principles and functions of 3PL..7 8. Success of 3PL.7 9. Benefits of 3PL8 10. Risks of 3PL..10 11. Necessities and Issues in Designing.10 12. Issues in Implementation..12 13. Choosing a Third Party Provider14 14. Why 3PLs..16 15. 3PL Response during Recession.17 16. Examples of 3PL companies in U.A.E.18 17. A Similar Example18 18. Conclusion19 19. References19

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EXECUTIVE SUMMARY: The report focuses on solving the problems the firm has faced recently. The report analyzes the problems in transportation and manufacturing sectors and has come up with a suitable solution. The report suggests that using a Third Party Logistics can solve these problems. All the contents in the report has been studied and analyzed by experts. The report discusses the principles and the major functions of 3PL and the factors that contribute to the success of 3PL in the parent firm. The report also discusses the benefits and risks of using the practice and the issues in design and implementation phases. The report specifies the different types of logistics providers which will help in choosing a 3PL provider. The report describes the different aspects that arise while deciding whether to outsource or not and also describes how the 3PL performed during recession period. The report also specifies the different 3PL providers residing in the U.A.E and also includes the best provider that can suit the firms necessities. The report has also gives an example of a similar automobile company which has outsourced some of its activities to a 3PL provider. INTRODUCTION: Our organization is one of the best automobile industries across the globe. In the last two years we have experienced some major issues in our transportation sector.. During this time period our manufacturing sector has also faced some technical failures and this has vastly affected our sales as well. Our decision makers have come up with a solution for these problems. They specify that the best alternative for this problem is to completely concentrate on the manufacturing and sales and to outsource other logistics activities like inbound and outbound transportation, warehousing etc. to any of the third party logistics providers [3PL].The experts specifies that following this practice can improve the functions of transportation tremendously as the 3PL providers has only the responsibility to control the transportation for our firm and that concentrating on a sole sector can improve the functions of that sector. This report includes the description, principles and functions of 3PL, benefits, risks and the implementation issues of 3PL.The report discusses the factors in choosing a 3PLand how 3PL responded during recession. This report also specifies some of the third party logistics companies who have successfully implemented this practice in U.A.E.

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PROBLEM IDENTIFIED AND SOLUTION: The most important problem identified inside our firm is the inefficiency in our transportation sector and manufacturing sector. Some of our vehicles have experienced technical failures in the last two years which has affected our sales vastly. Our transportation sector is not enhanced with the continuously growing demand. The solution advised by the experts is to concentrate completely on the manufacturing and sales sector and then outsource the other logistics activities to any of the known logistics providers. They suggest that it is cost beneficial to outsource than enhancing the logistical considerations of the firm. This single step solves both the problems of our firm. This will help us to solve the shortcomings of the transportation sector and it will also help us indirectly to concentrate in the research and find out the technical failures of our vehicles and thus provide the best vehicles to the customers. This step will surely solve the problems as concentrating on a small sector helps the employees to serve more accurately. However accurate and flawless communication is required between the hiring firm and the 3PL providers to reduce the bullwhip effect. DIFFERENT LOGISTIC PROVIDERS: Different types of logistics providers are in practice. They are classified as: 1PL: 1PL refers to small businesses where buying and selling takes place in the same location. They should have goods, cargo and freight to transport the goods to different locations.1PL is anyone who wants the goods to be shipped from source to destination.1PL is mainly the shipper and consignee. A manufacturer is an example of 1PL. 2PL: They are normally a service capacity supplier like a warehousing company or a trucking company. They offer services for a sole or only a small part of functions in the logistics. They have high stages of asset strength and features small returns but with low blockades of admission.2PL own fleets and other assets. Companies owning ships are examples of 2PL.

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3PL: Advancing from 2PL, 3PL has incorporated the logistical operations and added new logistics capacities to the firm. They may or may not have asset possession. They control all or a part of customers logistical operations. The value is based on the difference between the knowledge and information and the cost of transportation.3PL lean to be asset light with huge income. They own assets like fleets warehouses etc. and perform logistical functions like transportation. 3PL is the one that uses carrier for shipper and consignee.DHL, FedEx, Aramex are examples of 3PL. 4PL: They act as an integrator for companys logistical necessities. They are in charge for organizing and collecting non-stop answers. They offer huge value added guidance services to the companies as they have the absolute indication of the logistics and strong information abilities. They have strong IT base system and fine tune the companys businesses.4PLs are Extended 3PLs and are mainly non-asset based logistics providers. Information Technology companies like Oracle, SAP etc. are examples of 4PL.4PLs help 3PL and 1PL to run smoothly. 5PL: This is a new concept evolved in the logistics industry. They provide overall logistical solutions for the complete logistics. They focus on the companys Supply Chain and perform all the activities in a systematic and efficient way. They do not have any hard or soft infrastructure. (Vasiliauskas,Jakubauskas, 2007) THIRD PARTY LOGISTICS: A third party logistics provider (also known as 3PL or sometimes as TPL) is an organization which provides the most reliable and efficient services to the customers who opt to outsource their logistics services. They provide services for only a part or for all of the companies supply chain management functions depending upon the requirements. The 3PL offers a multitude of services, which is convenient and efficient, to the customers. The major 3PL operations like the Integrated Operation, Warehousing and Transportation Services can be calculated and customized to the needs of the customer depending on the conditions of the
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market, the demands of the products and the services and the delivery service requirements of their products as well as services. Due to the outsourcing trends in transport and delivery business, the concept or the principle of third party logistics has grown into a very promising and a well functioning logistics concept across the globe. In fact, the third party logistics industry has shown a tremendous rise from thirty billion to an eighty-five million industry over the past decade or so. With the extension in the performance of hauliers and forwarders the providers of third party logistics has complemented the effect of the logistics supply chain management to what might be called the outsourced logistics service providers. (Vasiliauskas,Jakubauskas, 2007). Nowadays companies are striving to maximize the profit and at the same time minimize the cost. To achieve this target the companies are developing a closer relationship with the 3PLs as they have successfully implemented these objectives in different industries. In short 3PLs provide: -Incorporated distribution and warehousing. -Maintain and provide the information infrastructure. - Value added services. -Tracking of information. -WMS (Warehouse Management Systems). -and are asset buyers as well as asset owners. (Gattorna,Ogulin,Reynolds,2002). DEFINITION: According to the explanation given in the board of Supply Chain Management Professionals glossary: Third Party Logistics is an organization which offers numerous logistics services for the customers. If possible these services are mixed or packed together by the supplier. Among the services third party logistics provide the inventory management, crossdocking, warehousing, transportation, packaging and freight forwarding. (Wales,J,2010).

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PRINCIPLES AND ROLES OF 3PL: The idea of third party logistics has been bought up because of the necessities to widely expand the transportation services of the transport companies to face the high demand from the customers. Generally more than one action is outsourced. These include storage, warehousing and transportation.3PL handles most or large portion of the customers supply chain and logistics behaviors. Its assessment addition calculation is supported on the awareness and information with an undifferentiated transportation service at the maximum lowly price. Third party logistics providers always lean to be the benefit glow with a promise of huge profits. Third party logistics certainly possess various resources such as most vital allocation centers in tactical sites or a petite amount of ships to provide in urgent situations. Third parties concentrate fewer on resources. The knowledge in logistics administration of a third party builds them more of a counter recurring; the poorer the series the more optimization of the supply chain is required by the companies. Furthermore, if the services of the third parties are more incorporated then they are nearer to the customers function. Third parties become more crucial to the customer because of this nearness, as the third parties turn into an associate to the customers in excess of a dealer.( Vasiliauskas,Jakubauskas,2007). 3PLs provide the hiring company an advantage over their competitors in the market. This is discussed in detail in the benefits of 3PL later in the report. The 3PL also symbolize the tactical aspect of the hiring firm. (Gattorna, Ogulin, Reynolds, 2002). SUCCESS OF 3PL: For the success of a 3PL in the hiring company three factors has to be given prime importance. They are excellent communication, directness to all the matters, and a vision of precision among the 3PL and the hiring company in all the issues..These factors come into play predominantly in unpredictable, unfavorable market situations which actually is the situation prevailing. Almost 75% of hiring company and 3PL firm agrees that this these factors contribute a lot in their success. Another factor that contributes to the success of 3PL is to have a significant individual association at the day-to-day operational phase. The success is at its peak when the employees of
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both the firms develop individual associations and work together to augment clients. The better coordination of procedures and information technology are also the key factors in successful alliance. Almost 70% of the present hiring company and 3PL firm agree that this factor contribute a lot in their successful relationship. The third important factor is the flexibility of the third party provider to adjust with the needs and demands of the hiring firm at the lowest possible cost. It is really important that the 3PLs achieve the goals and objectives that are agreed in advance with the hiring firms.65% of both the parties agree that this factor contribute a lot in their successful relationship. There are many other factors that contribute to the success of 3PL and hiring firm but these factors are given utmost importance by the companies.(panalpina,2009). BENEFITS OF 3PL: 1) Concentrating on the Core Potential: Allocating the firm to concentrate on its core competitors is one of the most regularly said benefits of 3PL. Because of the increasingly restricted business wealth, being a specialist in every nook and corner of the trade is frequently becoming complicated. With the help of 3PL companies the firms can solve this problem as they offer the opportunity for the company to concentrate on a specific area of knowledge thereby leaving the logistics firms to concentrate on their logistics skill. Therefore leaving the logistics considerations to the 3PL parties will help us to concentrate more on the manufacturing sector and thus provide the best output for our customers. This will also help us to counter against our competitors in the market. Hence outsourcing will help us a lot in providing huge amount of customer satisfaction with respect to our competitors and thereby improve our sales. 2) Offer Technical Potency: Another important advantage of using 3PL is the ever-growing demand for the technical elasticity. Because of the modification in the necessities, the development in technology and by the occurrence of improved technologies like RFID, the superior third party dealers does modernize their equipments as well as information technology continuously. In order to stay alive, a firm must meet the diverse necessities of their retailers such as information technology
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and delivery requirements which may be dissimilar for different retailers. These necessities can be met in a faster and much price efficient method only with the service of 3PL providers. It might also help the company to serve other retailers as the 3PL providers may have the excess capacity to serve the requirements of the current customers of the company. This would not have been possible for the company without the 3PL or would have been cost-effective. In this way it helps us to understand our customers and provide them the required services in better way.3PL providers also help us to access new retailers and thereby improve our sales. 3) Offer Financial Strength: Through the outsourcing of logistics activities the companies can save a large amount of capital investments which in turn vastly reduces the financial risks. For example, large amount of investments are required in various assets of logistics such as physical distribution centers or information networks and thus increasing the financial risks. Moreover by outsourcing to the subcontractors the 3PL spread the risk uniformly. It helps us to minimize the risk of the logistics concerns of our company.(David,Kaminsky,Edith and Shankar,2008,pp.258). 4) Reduction in Cost and Time: Most of the hiring companies agree that there is significant reduction in cost after they have employed 3PL. The companies have experienced a Reduction of Cost in logistics, Reduction in Fixed Assets of Logistics and Reduction in Inventory Cost. According to the statistics there is a 9% decrease in the total cost of the companies after they have employed 3PL. The firms also agree that time period of certain activities are also decreased with the involvement of 3PLs.Cycle time for activities like time to complete one order, rate at which the companies fill an order has decreased broadly. At the same time accuracy in an order has increased.(panalpina,2009). 5) Offer Other Suppleness: A company can experience larger elasticity because of the 3PLs.Suppleness in geographic sites is an instance. Dealers now need quick filling for which local warehouses are necessary. With the proper use of the 3PL suppliers for the storehouse, the customer needs can be satisfied without much assets and by consigning for a long term let out or by building a new
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warehouse. This will increase the responsiveness of our company without much capital and hence brings out large customer satisfaction. With the use of 3PL a change in service contributions can also be achieved as 3PLs may be much advanced to provide local customers a multiple range of services than the parent company. Furthermore through outsourcing suppleness in labor force size and in reserves can be attained. (David,Kaminsky,Edith and Shankar,2008,p.259). RISKS AND COSTS: 1) Loss of Control: Loss of control innate in outsourcing a single function is one of the most apparent disadvantages of using 3PL providers .This is absolutely right in the case of outbound logistics where 3PL company staffs may interact with the employees of the firm itself. In order to face these types of problems the 3PL companies strive very hard. Some of the measures to reduce this include drawing logos of the company on the side of the trailors, employing the same dress for 3PL staff as that of the hiring employees and providing broad report on each customer dealings 2) Other Issues: Its completely absurd for the organization to outsource the activities to the logistics providers if logistics is an important and a strong sector of the firm. This may not be a problem in our companys case as we are outsourcing in order to concentrate more on the manufacturing sector. (David, Kaminsky, Edith and Shankar, 2008, p.260). NECESSITIES AND ISSUES IN DESIGNING: Firstly a 3PL contract has to be made which is the intricate as well as the most key decision. To decide whether to deal a contract with a particular 3PL provider many considerations has to be analyzed. 1) Understand Your Expenses: To know your firms expense so that they can be compared with the expense of using the firm to which the logistic activities are outsourced is the major fundamental consideration to be made in selecting a third party logistics provider. Activity -based costing techniques is a lot
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essential to be used, that involves direct costs back to specific services and products and tracing overhead. 2) Customer Directions of 3PL: Selecting the provider based on the expenses is not sufficient. Advantages of 3PL consist of intangibles such as suppleness. Hence the companys tactical logistics arrangement and how a third party logistics provider involves into this plan would have to be regarded carefully. An analysis of third party logistics providers was done which identified some characteristics as most significant to the accomplishment of the third party agreement. The characteristics can be listed: The customer orientation of the provider was the most significant factor. This means that the capability of the provider to become accustomed to the services for the particular necessities of the hiring firm is related directly to the worth of the third party logistics relationship. Reliability was the second most important issue. This means that the third party has to be reliable to the hiring firm by fulfilling the needs of the firm efficiently. Flexibility of the third party provider or the capacity to respond to the requirements of the firms customers and to the requirements of the hiring firm, which is always varying, was the third important issue. Cost savings were shown considerably much down as the forth important issue. This analysis can be graphically represented as:

Accomplishment of third party agreement

Customer Orientation Reliability Flexibility Cost Savings

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3) Third Party Specialization: Every 3PLs has specializations which lie in specific area of logistics that are most relevant to the requirements. The companies must regard these factors when selecting a potential third party provider. For instance Roadway Logistics started as warehouse managers and FedEx have knowledge on time handling of small packages. So we have to take into account of those 3PLs who are specialized in our requirements like transportation and warehousing. Firms can allocate one of its trusted carriers as its 3PL provider. 4) Benefits Owning with Non-Benefit-Owning 3PL: Benefits owning firms have considerable volume, hefty customer base, systems in position, economies of scale and scope, availability of human resources. On the other hand these companies may lean to support their own divisions of work, may have lengthy decision making cycle and may be technical. Non Benefit owning firms, on the other hand, might be extra elastic and are capable to mold services and also have the choice to match and blend providers. They might have fewer assets and limited negotiating power, at the same time they might have less service expenses and specific service knowledge at the other hand which is the advantage. We need to examine these 3PLs carefully and select the one which will suit the needs of our firm. (David,Kaminsky,Edith and Shankar,2008,pp.260). ISSUES IN IMPLEMENTATION: The commencement of the procedure has only done when a third party logistics partner is chosen. After that an agreement has to be made and suitable efforts have to be made by the two firms to begin the correlation successfully. From the unsuccessful third party agreements professionals spot to a particular message: A sufficient amount time has to be dedicated to startup deliberations. This means that the most complicated and vital element of any third party logistics coalition is to start the relationship efficiently during the first half of the year to the full time of the year. The requirements for the relationship to be perfect must be recognized precisely by the firm acquiring the services. They should also be capable to offer measures for the precise
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presentations and provide what the third party logistics company requires in order to have a smooth and steady relationship between the 3PLs and the hiring company. The above said issues have to be done by the hiring firm. In order to enforce the implementation successfully the logistics company must also consider certain issues. The 3PL company, on the other hand, should truthfully and entirely confer and regard the above said necessities which include pragmatism and significance. In order to make the bond successful ample efforts and time should by dedicated by both the companies. It is important for both companies to believe that with the collective risk and recompense the benefits will be awarded to both the companies as the contract is an equally favorable 3PL agreement. In the agreement both the companies are associates-neither the hiring company nor the 3PL firm can take up the ownership and hence neither firm can accept the business pricing attitude. In a whole, the most important factor to be considered for any outsourcing plan to be successful is the effective communication between the partners. Firstly, the managers of the hiring company should converse with each other and should also communicate with the staffs of the company and convey them why the company is outsourcing and what are the expectations from the outsourced activities. It helps the employees of all the applicable divisions to be in pace with the top level managers and thereby develop properly to engage with the changes of the firm. Obviously, it is significant to have effective communication among the hiring company and the third party logistics firm so that there is no confusion between the companies on the functions they indulged to perform. To have a communication in a broad way is simple, but if both the firms need to be beneficial from the outsourcing agreement an effective and precise communication is vital. Now considering the technologies, the communication among the suppliers structure of the hiring company and those of the third party provider is frequently essential. This helps the companies to understand the supply style of each other. At the same time the hiring company must evade third party companies who exploit sole information structures, as to incorporate these companies with other systems is really very difficult. Some of the other factors to be considered with the third party provider are:-

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a) The 3PL company as well as their service suppliers should value the privacy of the information that the hiring company gives them. There should be enough trust between the hiring company and the 3PL firms which will help to have a clear information flow between them. b) Exact presentation procedures should be decided ahead. The performance of the 3PL company should be clear between the hiring firm and the 3PL firm so that the hiring company can make up the performance according to the 3PL company. c) Detailed criterion concerning subcontractors must be conferred. d) Adjudication concerns must be measured prior to signing the official agreement. This step will considerably reduce the problems that may occur during the work. The role of 3PL and the hiring company should be specified clearly. e) Break out phrases must be conferred in the agreement. This reduces the problems that may occur during the break out period. f) Processes that make certain that the performance objectives are set correctly must be conferred. This will help the companies to understand the targets that they are required to meet. (David,Kaminsky,Edith and Shankar,2008,p.261). CHOOSING A THIRD PARTY PROVIDER: It is very important to choose the right third party provider that will fit all the necessities of the company and provide their services at the best promising cost. The companies can select 3PLs among types of 3PL providers or among the companies that own assets and those without assets. A) TYPES OF 3PL PROVIDERS: Four types of 3PL providers are there: 1) Typical Third Party Providers: This describes the essential type of third party provider. The vital roles of logistics such as distribution, warehousing, pick and pack are performed by these 3PL providers. The third party logistics function is not the key action for most of these companies.
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2) Service Developers: They provide the new and the best services to their clients like cross-docking, tracking, tracing, packaging and other specific functions. The concentration on economies of scale and scope and a strong technology base helps the company to perform the above said functions. 3) The Client Adapters: These third party providers take the complete power of the firms logistics functions after the request of the client. They dont develop a new project but improve the logistics function radically. These third party providers have a very small client support. 4) The Client Developers: The peak level that a third party provider can achieve with respect to its procedures and services. In this type of 3PL the third party provider takes control of the entire logistics function and incorporates with the clients. They serve only a few customers which helps to increase the customer satisfaction. These third party providers provide a widespread and specified task for a few customers.( Vasiliauskas,Jakubauskas,2007). B) ASSET BASED AND NON-ASSET BASED: Asset based 3PL firms have their own assets like trucks, warehouses and people to support the hiring firm. They use these resources to provide the required services for the hiring firm. Non-Asset based firms also known as management based firms offer the management and technical support to perform the logistical functions of the hiring firm. But the disadvantage is that they use the assets of other firms and does not own any assets. If the company owns the assets then the company can hire management based 3PL firms as they are cheaper than asset based 3PL firms. The other type of 3PL providers are integrated providers. These are the firms that complement their own functions with the functions of the hiring firm. They can either be asset based or management based.( Murray,,n.d).

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WHY 3PLs 3PLs may or may not be essential for a company to succeed. There are companies which are successful without employing logistics. The next portion discusses the factors to be considered by a company to decide whether they should employ 3PL or not. WHICH COMPANIES SHOULD USE 3PL The managers have to make sure that the ability of the 3PL firms is utilized effectively to maximize profits for the parent firm. A company should hire 3PL firm if the company needs to: 1) Improve the Logistics: If the company feels that their current logistics company does not have enough capacity to satisfy the logistics needs of the company and that reconstructing the logistics would be much costlier than employing a 3PL then a company can think of hiring a 3PL to perform their logistics considerations. 2) Increase Area of Opportunity: If the company needs to exploit new markets without building high cost warehouses or distribution centers then the company should hire a 3PL firm to distribute in those markets. This will help the hiring firm to reduce the cost of facility and maximize profits from the markets. 3) Increase the Size of the Organization: If the company is increasing steadily, after a certain period the company gets so large that it will no longer be cost effective to hire employees to manage their shipping needs and to call on every shipment will no longer be feasible. Hence hiring a third party would be beneficial for the company in such situations. 4) Reduce the Risk: 3PL companies can be used by firms if they find difficulties in some areas of the process. If the firm feels that they cannot respond to the customer demand with their available resources then the firm can hire a 3PL company to perform the tasks where the company feels risky. The company should ensure that the hired 3PL company has the potential to solve their problems. If
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less capacity in warehouse is the problem, the company should make sure that the hired 3PL firm has a larger warehousing capacity. ( Blanchard,2008). WHICH COMPANIES NEED NOT USE 3PL? The companies need not employ 3PL if: 1) Logistics is a Strong Aspect of the Firm: The firm need not hire a third party logistics company if the company itself is perfect in the logistical activities of the firm that is if the company itself is their own logistics manager. Almost 30% of the firms who are not employing 3PL suggest this aspect. 2) Management of Outsourcing Weakens: The companies need not employ 3PL if they consider this action will weaken their control over the outsourcing activities. The companies may need to have a strong direct bond with their suppliers and they may feel that outsourcing to 3PL may reduce these relationships. Almost 25% of the firms who are not employing 3PL suggest this aspect. (panalpina,2009). 3PL RESPONSE DURING RECESSION: During the recession period 3PLs try to reduce the limitations in forecasting, inability to respond to the variations in demand and variations in cash flows. 3PL try to reduce the above said limitations through different methods. They try to reduce the cost of operations to maximum. They reduce the cost in inventories and other logistics costs so that the risk can be minimized. They also try to improve forecasting and management in inventory. Since the demand is always fluctuating during recession, 3PLs try to do better forecasting and inventory supervision so that there is no excess demand and there is no out of stock situation. The previous facts and figures shows that companies employing 3PL has increased significantly during recession indicating that 3PLs has performed well during the recession period. (panalpina,2009).

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EXAMPLES OF 3PL COMPANIES IN U.A.E: Some of the well-known 3PL companies functioning in U.A.E are DHL, FedEx, Aramex, UPS, Agility, Gulf Agency Company, Swift Freight, Al Futtaim Logistics, Danzas, Liberty logistics. The best 3PL providers are those who are tactically placed in the global market and those who outclass all others in operations and thus raise the market value. Our experts suggests that DHL can provide us the better services as they provide one of the best services in middle east as well as Asia pacific region which also are the main markets of our company. They provide better services at a comparable price. They provide services to countries like Republic of China, Vietnam and others where no other third party has exploited till date. They also have service sectors which are expanding in India. Since most of our suppliers are from India, availing DHL services can improve our relationship with our suppliers. The professionals of DHL work with the experts not just within the logistics but also in their area of marketplace in order to maximize customer benefits. This helps them to gain industry sector solutions which in turn offer the customers with genuine competitive benefits. The activities of DHL include: Freight through air, ocean, rail and road. International mail solutions. Supply chain solutions. Warehousing and distribution.( DHL,2010). A SIMILAR EXAMPLE: Example of an Automobile Company using 3PL: Saturn, a division General Motors, is a perfect example of an automobile industry which has outsourced logistics considerations to a 3PL firm. Saturn has got into a partnership deal with the Ryder Logistics Company. Saturn completely concentrates on the manufacturing sector and the Ryder logistics administers most of the Saturns other logistics concerns. It is the Ryder Logistics who deals with the vendors and deliver the required materials to the factory of Saturn located in Spring Hill, Tennessee. Ryder Logistics also take control after the finished products
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are made as they are responsible to deliver those finished goods to the wholesalers and retailers. Saturn uses most modern operational techniques like Electronic Data Interchange (EDI).They use EDI to order the parts and sends the same to the Ryder Logistics so that there is no confusion between them thus reducing the bullwhip effect. This helps the Ryder Logistics to order the parts in advance which ultimately increases responsiveness of Saturn. Ryder, in advance makes all the essential orders from 300 different vendors in the United States, Mexico and Canada. To arrange the paths successfully and to reduce the transportation expenses they use unique decision support software. (David,Kaminsky,Edith and Shankar,2008,p.258). CONCLUSION: This report provides an effective solution for the transportation problem that the company has faced recently. This step will also help to improve the manufacturing sector as well. The report has deeply discussed the principles,benefits,risks and issues in designing and implementation. The report also discusses the different factors that contribute to the success of the 3PL in the hiring firm. As per the analysis discussed above implementing 3PL will allow our company to focus on our core functionalities. This will also help to target new markets and also provide technological as well as financial strength. The report explains how 3PLs tackled the recession successfully with different techniques. The report has also suggested a 3PL company which can solve the issues which the company is facing and provide the benefits. This practice if implemented successfully can be much beneficial for the company. After the results obtained from the researches the experts have come into a conclusion that employing a 3PL successfully would provide the best solution for the problem and would be beneficial for the company provided that the above said issues are checked thoroughly and continuously. REFERENCES: 1)Simchi-Levi,D.Kaminsky,P.Simchi-Levi,E. andShankar,R.,2008.Designing and Managing the Supply Chain.3rd ed.New Delhi:Tata McGraw-Hill Publishing Company Ltd. 2) Gattorna,J.Ogulin,R.and Reynolds,W.M.,2003.Gower Handbook of Supply Chain Management.5th ed.Hampshire:Gower Publishing Ltd.

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3) Vasiliauskas,A.V. Jakubauskas.G.,2007. PRINCIPLE AND BENEFITS OF THIRD PARTY LOGISTICS APPROACH WHEN MANAGING LOGISTICS SUPPLY CHAIN. TRANSPORT 2007, Vol XXII, No 2,[online].Available at:
<http://www.transport.vgtu.lt/upload/tif_zur/2007-2-vasilis-vasiliauskas_jakubauskas.pdf>[Accessed 8

October 2010]. 4) The State of Logistics Outsourcing,2009. 2009 Third Party Logistics:Available at:
<www.panalpina.com/.../3pl_study.-Slot2-0001-DownloadRef.pdf>

[Accessed 10 October 2010]. 5) Murray,M., n.d. Selecting A Third Party Logistics (3PL) Provider, About.com Guide,[online].Available at: <http://logistics.about.com/od/strategicsupplychain/a/select_3PL.htm> [Accessed 11 October 2010]. 6) Blanchard,D.,2008.How to Select a Third Party Logistics Provider,Industry Week,[online].Available at:< http://www.industryweek.com/articles/how_to_select_a_third_party_logistics_provider_16302.a spx> [Accessed 5 November 2010]. 7) Wales,J.,2010.Third party logistics,wikipedia,[online].Available at: <http://en.wikipedia.org/wiki/Third-party_logistics> [Accessed 5 October 2010]. 8) DHL,2010[online]Available at:< http://www.dhl.co.ae/en.html> [Accessed 10 November 2010].

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