THIRD PARTY LOGISTICS

Chandan SinghDr. Rajendra Prasad Central Agricultural

University, Pusa

Contents

• Introduction TPL• Importance TPL• The infrastructure required for a TPL• Steps for a TPL• Evaluating Performance TPL• Operation of Indian TPL• Logistic chain for TPL

Introduction

TPL refers to the concept of outsourcing the logistic and distribution of a manufacturing or service firm to a logistic and service provider so that manufacturing company can focus on its core competencies of new product development, manufacturing , and marketing the product.

Importance of TPL

Improved strategic focusResource constraintsLowered costsExpansion of marketFor more professional scientific approach to

logistic problem

For improvement in service level with improved response time

For efficient management of inventory resulting in better utilization of working capital

Increased flexibility

The infrastructure required for TPL

• Warehouse• Fleet of vehicles• Hardware and software to take care of

information need• Advanced material handling capabilities• Good team of consultants• Trained manpower

Steps in TPL

• Knowing where to go – Companies should define their logistics management goals and attempt to visualize their organization status after they have outsourced their logistic activities.

• Knowing the need and objective – It helps the companies in selecting a TPL that best fits in heir requirement.

Evaluating Performance

Transportation On time shipmentOn time deliveryTransportation cost per mileWarehousingPer unit cost of warehousingCost of warehousing including the overheadsWithin time period

Conti…

Number of cases handled per hour or per employee.

Picking accuracyOrder fulfillmentItem fulfillmentInventory accuracyNegligence loss and damage

Conti…

CostService costCost reductionQualityReportProcess of improvementAvailabilityCustomer satisfaction

Operation of Indian TPL

• Gati• Transport corporation of India Ltd.• Blue Dart logistics• DHL logistic• Fed Ex• AFL logistic

Logistic chain

Supplier Sourcing Inventory1 raw material Production Finished product Physical distribution

Customer

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