Inbound Logistics

By

PRATICK GAYEN.

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Presentation Plan

 The production planning process

 The procurement process

 Outsourcing of logistical activities

 Third Party Logistics providers

(3PL’S)
 Partnership agreements

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 Sub-contracting and
Outsourcing
 Sub-contracting:
 Activities that are too complex or that require
special competencies
 Activities that are outside the field of
competencies of our enterprise (example
construction and aerospace industry)
 Outsourcing:
 Delegate to others activities that we were
doing ourselves previously
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Outsourcing of logistical
services to «3PL’s»
 To delegate to another organization
part or all of logistical activities
 These activities include:
 Transportation
 Warehousing
 Order processing
 Inventory management
 Logistics information systems

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Some of the major 3PL’s
 Ryder  TNT Logistics
 Tibbett & Britten  Hunt Logistics
 Circle  UPS SCS
 Schneider  DSC
 Bax Global  Caliber
 Exel  Menlo
 GATX  USCO
 Geodis  FedEx

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 3PL: Some examples

 Whirlpool Ryder Dedicated

 Motorola UPS SCS
 Proctor & Gamble Exel Logistics
 Wal-Mart (Can) SCM (T & B)
 Domtar (Can) Groupe Robert
 Goodyear CAT

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 Reasons for using 3PL’s?
Re d u c e c o sts
F o c u s o n c ritic a l a c tiv itie s
Im p ro v e o p e ra tio n a l effic ie n c y
F lex ib ility %
Ac q u ire e x p e rtis e
C u s to m e r se rv ic e

0 20 40 60

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 3PL’s: Services offered
Transportation
Warehousing
Consolidation

Consultation
Carrier selection
Packaging and labelling
%
Information systems
Tariffs negotiation

Fleet management
Reverse logistics

0 20 40 60 80

Source: CLM Annual Conference, 1999.

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 Partnership - a definition

• A partnership is a customized business

relation based on mutual trust, openness,
and the sharing of risks and benefits.
• Its objective is to procure a competitive
advantage resulting from improved
performance compared to what partners could
have obtained individually.

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Partnership Life Cycle

 Having a vision
 Searching for a partner

 Negotiating an agreement

 Managing the relationship

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Having a vision and searching
for a partner

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 Forming a partnership
Reasons Factors
leading to a facilitating
partnership Decision to engage partnerships
in a partnership

Shared activities and processes

Partnership results

Reevaluation
Source: Lambert, D.M., M.A. Emmelhainz et J.T. Gardner, «Developping and 04/11/09 10:23 PM
12
Implementing Supply Chain Partenership», IJLM, vol. 7, no 2, 1996.
 Reasons leading to a
partnership

External factors:
•Consumer requirements
•Logistical excellence / complementary
•Information technologies and systems
•Complexity and globalization of markets

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 Reasons leading to a
partnership

Internal factors:
• Minimizing costs (ex. transportation)
• Increase speed and reduce cycle time
• Improve service/product quality
• Increase customer satisfaction
• Better utilization of assets

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Partnership - advantages
 Reducing the number of suppliers
 Collaborative planning

 Risk sharing

 Continuous improvement

 Acquiring an expertise

 Requiring less resources and capital

 Increased flexibility

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Partnership - disadvantages
 Difficult to select a partner
 Loss of direct control over outsourced
activities
 Performance evaluation may be difficult

 Risk of logistical dependency

 Internal resistance to change

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Facilitating factors
 Compatibility of organizations in terms of culture
and conduct (individuals)
 Similar management techniques and practices
 Readiness to share with partner
 Complementary needs and competencies
 Symmetry
 There must be a common interest!

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Activities supporting the
partnership (cont’d)
 Mutual trust and engagement
 Sharing risks and benefits

 Investments
 Human
 Material
 Financial

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Conditions for a successful
partnership
 A complex and  Exchange of
gradual approach « rich » information
 Trust between  Shared innovation
partners  Firm engagement
 Socio-  Common learning
psychological process
proximity
 Dedicated
resources

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Conclusion

 Partnership arrangements have to

be adapted to the particular
situation and specific needs of the
partners
 Successful partnerships require
time and energy

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