LOGISTICS OUTSOURCING

CONTRIBUTORS:
MADE BY: HaJi
ASSISTED BY: Leon
SECONDARY DATA COLLECTOR: Prathamesh
CO-ORDINATOR & PRESENTERS: Ashraf
MISC WORK & PRESENTERS: Suyog

Teacher/Guide:
Sir, Ranjeet Thakur.
 INTRODUCTION TO OUTSOURCING

Outsourcing is the contracting out of any task, operation, job

or the process that was originally performed by the
employees within the organization to a third party for a
significant period of time.

These outsourcing functions can be performed by the third

party on-site or off-site.

Hiring a temporary employee when your other employee is

on a leave is not outsourcing.
 WHY OUTSOURCING:
There are many reason why a company prefer outsourcing which may
include:

RESOURCES SHORTAGES

COST SAVING

TIME SAVING

REDUCE THE WORK LOAD

REDUCES OVERHEAD COSTS

LOGISTICS ACTIVITIES

Supply chain planning

Long term, short term

Supply chain execution

Freight management (usually upstream
management), economies of scale
Contract logistics (usually downstream
management of goods)
LOGISTICS OUTSOURCING

Why Outsourcing?
LOGISTICS AND SUPPLY CHAIN
MANAGEMENT
Integration of logistics activity
A SIMPLE SHIPMENT

Negotiating a price with the carriers

Scheduling a shipment date with the carriers
Scheduling and carrying out inland transportation
from supplier to port of shipment
Customs clearance and payment at shipping port
Loading to the main carrier
Unloading and customs clearance and payment at
destination port
Scheduling and carrying out inland transportation
from destination port to buyers site
LOGISTICS OUTSOURCING

Logistics Outsourcing Definition

Key Element:
Deciding to obtain selected, recurring, non-core goods and services
previously provided internally, from outside the company
Finding outside providers and new ways to secure the delivery of
raw materials, goods, components and services, by
Utilizing the knowledge, experience, creativity and facilities or
capabilities of new providers not used previously, thus
Handing over or transferring the planning, management and
operation of certain functions to an independent third party, and
Using formalized agreements/contracts and payment.
LOGISTICS OUTSOURCING

Benefits of Business Process Outsourcing

Best in Class Capabilities

Better Use of Company Resources

Reduce Operating Costs

Reduce Business Risk

Company Lacks Necessary Resources

LOGISTICS OUTSOURCING

Levels of logistics outsourcing

In-house logistics

Logistics service provider (LSP)

Third party logistics (3PL/TPL)

Fourth party logistics (4PL/FPL)

Fifth party logistics (5PL)

FORMS OF OUTSOURCING OF LOGISTICAL SERVICES
LOGISTICS OUTSOURCING

IMPACT OF OUTSOURCING LOGISTICS

Advantages of Logistics Outsourcing

Cost Reduction
Service and Technology Improvement
Strategic Flexibility
Capital Investment Saving
Focus on Core Competency
Sharing and Reducing Risks
LOGISTICS OUTSOURCING

IMPACT OF OUTSOURCING LOGISTICS

Disadvantages of Logistics Outsourcing

Loss of Control over the Supply Chain

Minimization of Cost Awareness

Lack of Improvement and Innovative Ability

Human Resource not adjusted to the new environment

LOGISTICS OUTSOURCING

Logistics Outsource Process

System Takeover

Joint Ventures

System Spin-off

Management-only Contract
BIBLOGRAPHY:
1.Logistics guide/textbook published by RISHABH and
SETH PUBLICATION Respectively.

2.Secondary data collected from www.slideshare.net

3. https://en.wikipedia.org/wiki/Logistics

4. Logistics Outsourcing: A Management Guide

Book by Clifford F. Lynch
ANY QUESTIONS?
Thank You

FOR YOUR VALUABLE TIME!