Agri-Logistics & Sustainable Supply

Chain Management

Faculty Name: Sharvari Patil

MIMA’s Values, Vision, Mission
• MIMA’s Core Values
1. Business Ethics
2. Inclusion
3. Commitment to excellence
4. Learning mind set

• MIMA’s Vision – To be amongst India’s top 100 leading business schools that
nurtures Industry-ready professionals.

• MIMA’s Mission -
1. To nurture future industry leaders with a strong business acumen and
commitment towards business excellence.
2. To foster learning mind set and enhance career opportunities in management
field.
3. To develop leaders who manages diverse teams in multidisciplinary business
projects.
 Vision, Mission ,
Program Educational Objective (PEOs)
• Vision – PGDM in Agri-Business Management

To be amongst India’s leading business schools that nurtures Industry-ready professional in Agri-Business
Management.

• Mission – PGDM in Agri-Business Management

1. To nurture future industry leaders in Agri-Business industry with a strong business acumen and commitment
towards business excellence.
2. To foster learning mind set and enhance career opportunities in Agri-Business management.
3. To develop leaders who manages diverse teams in multidisciplinary project of Agri-Business Industry.

• Program Educational Objective (PEOs) – PGDM in Agri-Business Management

1. Developing an executive in Agri-Business management who believes in continuous learning and addition of
skill set for enhancing employability quotient.
2. Developing future industry leaders who are abreast with contemporary business trends and frameworks.
3. Developing entrepreneurial mind set with an inclusive outlook towards fellow professionals and society.
 CONTENTS
CONTENTS
• Overview of logistics: introduction
• Nature & concepts of logistics
• Evolution of logistics concepts
• Importance logistics Management
• Operational Objectives of Logistic Management (Six Rs)
• components of logistics management
• functions of logistics management
• Introduction to supply chain management
• value chain
• Supply chain Effectiveness and Indian Infrastructure
• outsourcing
• 3PLs
• fourth party logistics(4PLs)
 Course Title:

Agri-Logistics
&
Sustainable Supply Chain Management
Unit 1
 Overview of logistics
Introduction
end to
Changing Business Environment thoselast
since rigidities
decade and restrictions tha
were acting as a hindrance to the growth
the country
Macro Reasons

- Consumers become selective

- Conscious about their purchase
decisions
- Distributors/ retailers are conscious
about their own returns due to
availability od attractive trade
opportunities
Micro Reasons
- Companies are increasing their product portfolio
- Quick information
- Prominent display
- Ready and intact delivery
- 24 hrs. on the spot and after sales services
- Eagerness to sort out complaints
 Supply Chain
Plan
Logistic Implement
Control

Forward Flow

Reverse Flow
Logistic
 Nature & Concept of Logistic

Greek word ‘Logisticos’ meaning the “science of computing and calculating”

Logistics is the process of planning, implementing and

controlling of efficient, effective flow and storage of
goods, services and related information from the
point of origin to the point of consumption for the
purpose of conforming to customer expectations.
Bowersox and Closs:

“Logistical Management includes the design and

administration of system to control the flow of
materials, work-in-process, and finished inventory to
support business unit strategy.”
Efficiency is the capacity to do a task with the
least amount of money, time, or effort spent, or
the level of performance proficiency.

The degree to which something is successful in

yielding the intended outcome is known as its
effectiveness.
https://www.linkedin.com/pulse/efficiency-vs-effectiveness-muneeb-memon/
https://www.linkedin.com/pulse/efficiency-vs-effectiveness-muneeb-memon/
https://www.linkedin.com/pulse/efficiency-vs-effectiveness-muneeb-memon/
 HR person hiring new employee very
quickly by reducing the cycle time of the
approval process. It is a good example of
efficiency but at the same time it is
possible a person has not a specific skill
of his role. But the efficiency says "HIRE
NOW"
 Major features of logistics management :

(i) It ensures a smooth flow of all types of goods such as raw

materials, work-in-process and finished goods.
(ii) It has the ability to meet customer expectations and
requirements of goods.
(iii)It ensures the delivery of quality product.
(iv)It offers the best possible customer service at the least
possible cost.
(v) It is an integration of various managerial functions for
optimization of resources.
(vi)It deals with movement and storage of goods in appropriate
quantity.
(vii)It enhances productivity and profitability.
 Productivity

Productivity is defined as "the ratio of output to

input within a defined time period with due
consideration for quality”
• Production: Creation of goods and services to satisfy human
needs.
• Productivity: Productivity is defined as "the ratio of output to
input within a defined time period with due consideration for
quality”
• Effectiveness: Effectiveness is the extent to which someone or
something is successful towards meeting the desired outcome.
• Efficiency: Efficiency refers to the act of performing activities
with minimum wastage of time and optimum usage of
resources, so that the work done is faster and in an error free
manner.
Evolution of Logistics
Apple: https://youtu.be/Lpp9bHtPAN0
Importance of Logistic Management:

1. Boost Business Profitability

2. Improve Customer Experience
3. Reduce Operational Cost
4. Ensure Seamless Delivery
5. Success of Supply Chain
6. Improve Warehouse Management
7. Enhance Visibility
8. Intelligent Route Planning
9. Risk Management
10. Scalability
 Importance of Logistic Management:

1. Boost Business Profitability

It has the ability to improve the operational excellence

which is necessary to grow and expand your business.
Managing logistics is extremely crucial as it helps the
organisations to gain deep insights of the supply chain.
This also increases the order fulfilment rate and enables
strong business outcomes. Providing value to customers by
implementing the latest technological innovations can
improve the productivity and profitability of the
operations.
 2. Improve Customer Experience

Track different aspects of the supply chain is the

essence of the logistics process. It allows
companies to communicate effectively with the
customers and provide fast and quality service to
them. Hence, smooth logistics operations create
enormous value to the customers, which in turns
build the brand reputation. Providing better
customer services is a key to success for
businesses.
 3. Reduce Operational Cost

Logistics management leads to transparency and

visibility in the operations. This tends to improve overall
efficiency of the business as it provides route
optimization to enhance on-time delivery and reduce
the fuel cost. It is an important element to keep your
expenses lower by analysing and monitoring the real-
time data. Also, an effective logistics management leads
to supply chain transparency which is necessary for
businesses to optimise asset utilisation.
 4. Ensure Seamless Delivery

Professionally organised logistics tends to deliver the

right products at the right time. In the modern world,
delivery processes are continuously evolving as fast
and safe shipping adds value to the customer
experience. Logistics management focuses on
delivering the products to the customers on time or
ahead of schedule. Therefore, the on-time delivery is
the primary focus of the well-organised SCM
strategies.
 5. Success of Supply Chain

Logistics management deals with numerous aspects

of supply chain such as production, automating
functions, material handling, distribution and so on.
Monitoring these networking within the supply chain
is a major component for the efficient functioning of
the business operations. Moreover, a successful
supply chain management helps you boost your
business value. Additionally, organisations can gain a
clear advantage over the competition.
 6. Improve Warehouse Management

When you optimize the logistics activities, it allows you to

control and monitor your warehouse operations. Centralising
the complex task by developing warehouse inventory plans is
always advisable for the businesses to operate effectively.
Warehouse management activities involve storage and
material handling of goods. It is a core pillar in the
transportation industry that starts from auditing and tracking
to distributing the goods to its final destination.

https://www.axestrack.com/importance-of-logistics/
 7. Enhance Visibility

Managing your logistics is important for business

growth as it plays a major role in improving
connectivity, interoperability, and visibility of the
operations. You can analyse every stage of your supply
chain in real-time. Gaining essential information
enables businesses to control cost and figure out
efficiencies. Therefore, transparency across the supply
chain tends to reduce failures and help you in meeting
the customer demands. Ensuring synchronised supply
chains is a vital process to benefit both the companies
and customers.
 8. Intelligent Route Planning

Executing delivery and logistics operations with an

intelligent route planning software can lead to great
customer service and minimal expenses. Optimization of
routes with the most efficient
GPS tracking company in Jaipur is considered to be an
important aspect of logistics management as
implementing route planning software reduces the
manual dependencies and amplifies timely delivery. In
addition, it also increases safety of drivers, products and
vehicles. Importance of logistics management to handle
the transportation is enormous for business growth.
 9. Risk Management

Preparing a risk management plan enables

business owners to clearly understand the
disruptions in an effective way. Assessing your
supply chain activities to evaluate the impact of
operations can guide the business to predict the
supply and demand beforehand. Logistics
management can develop an effective approach
of risk management to minimise the impact of
business threats. Streamlining the logistics
planning processes is important for creating
value for customers.
 10. Scalability

Managing and monitoring the distribution network is

necessary to meet the industry’s growing demands.
The software has the ability to create the business
more scalable by quickly responding to disruptions.
Therefore, embracing cutting-edge softwares focuses
on demand-driven logistics expansion and scalability.
Optimizing the logistics planning activities and
identifying the emerging trends can also enhance the
accuracy of the operations.
Operational Objectives of Logistic
Management (Six Rs):

Right Response
Right Quality
Right Quantity
Right Value
Right Costs Trade-offs
Right Information
Components of Logistic Management
Functions of Logistic Management

Procurement Function
Production Function
Physical Distribution Function
Smooth flow of raw material , parts,
components of specified quality and
quantity from quality certified suppliers
to the production centers.

Other procurement logistic functions:

Handling
Storage
Movement to shop floors for final use in
the manufacturing process.

These function are called ‘in-bound

logistics’ or traditionally ‘ Material
Management’
 The production function of
logistic deals with efficient
and effective management
of work -in- process
inventory and its flow
between the different stages
of manufacturing.

Other production logistic

functions:

Inputs inventory
Production schedule
Material handling
Storage
Temporary protective
packaging
Final packaging

The production function of logistics is also called as

‘manufacturing function’ or ‘operation function’ of logistics and
positioned in between procurement function and physical
distribution.
The movement of finished
goods from the last point of
production to customer or end
users.

Other physical distribution

logistic functions:

Forecasting
Information flow
Materal handling

These function are called ‘out-

bound logistics’ or traditionally
‘ Marketing logistics’
 Supply Chain Management

The phase from 1990s onward is recognized as the era of Supply Chain
Management, which has been defined by the Global Supply Chain
Forum of 1994 as:
The integration of key business processes from the end user through
original suppliers that provides products, services and information
that add value for customers (Acharya, 1999).

American Production and Inventory Control Society (APICS) defines

SCM as:

Organizations that successively transform raw materials into

intermediate goods, then to final goods and deliver them to customers
(Deshmukh and Mohanty, 1999).
According to T. Davis (1993):

The supply chain is the network of organizations that are

involvedthrough upstream and downstream linkages in the
different processesand activities that produce value in the
form of products and servicesin the hands of ultimate
customers.

An external integration of interrelated functions of the firm

with its channel members, vendors, and all third-party
logistics service providers who contribute in the flow of
goods (raw materials, semi-finished and finished products)
and related information from the point of inception to the
point of consumption with efficiency (Agrawal, 2001).
Value Chain
 Value Chain

FLOW Direction Components involved

Value Flow Quality
Costs
Quick Response,
Availability
Consistency

Goods Flow Supplier

Shipper
Producer
Transporter
Distribution Warehousing
Transport
Customer
FLOW Direction Components involved

Cash flow End user

Retailer
Wholeseller
Companies distribution warehouse
Head office
Supplier of raw material
Information Backward Information:
Flow Quality feedback
Customer order & specification
Procurement quantity with specification & timing
Strategic Capacity
Production & dispatch planning

Forward Information:
Availability of goods
Order Processing & Management
Order Status
Invoice
Transportation and shipping advices
Quality assurance
Warranty cards
Operating manual
ICT: https://youtu.be/DzZCVqrtXYw
Supply chain effectiveness and Indian infrastructure

https://timesofindia.indiatimes.com/blogs/voices/indias-infra-dev
elopment-will-act-as-a-backbone-to-the-logistics-supply-chain-ind
ustry-in-2022
/
 Outsourcing

Outsourcing is when a company hires a third party to perform their

task; in other words, when a company employs another company
to fulfilling its tasks, it is termed outsourcing.

In 1989, it was first recognized as a business strategy, and later, in

the 1990s, it became a fundamental part of the business.

https://economictimes.indiatimes.com/definition/Outsourcing
 Benefits of Outsourcing Supply
Chain Management

Focus on Core Competencies:

Outsourcing the supply chain from a third party would reduce

the hassle caused by integrating an in-house supply chain
management system. It helps with end-to-end integration and
caters to all essential supply chain requirements. Setting up a
fully functional supply chain might hinder other business
operations, causing discrepancies in the functioning of core
competencies. Thus, outsourcing in supply chain management
makes the process more streamlined and effective, helping
the business focus on critical operational functions.
Competitive Advantage:

Outsourcing the supply chain management gives access

to several facilities and technologically equipped
systems. Thus, leveraging these facilities and amenities
into the business and integrating supply management
with a fully functional chain helps deliver top-notch
quality services to the customer and audience. Besides,
outsourcing also brings expertise and experience in the
field to the table making strategic management easy.
Thus, supply chain outsourcing is beneficial and helps
with giving a cutting edge to the competitors,
Cost-Effective:

Setting up an in-house team to manage the supply

chain and regulate its functions from end to end will
add to the expenses causing financial strain to the
company. However, while outsourcing, experienced
professionals with expansive knowledge of the field,
high-quality equipment, and top-notch amenities are a
part of the deal. The third-party partners take up the
responsibility and streamline logistics with absolute
efficiency. Thus, it helps save overhead costs and assists
the business to work with total efficiency and reap
better results. A fundamental cost-effective strategy,
outsourcing in supply chain management promotes the
better performance of all functions.
 Reduces Risks:

Outsourcing supply chain management is an

intelligent approach to mitigating the risk factor
arising from logistics integration. Equipping high-end
technology and the latest tools ensure quality control
during transit. Apart from that, outsourcing the
supply chain management process from a third party
also protects against the labor or financial risks
occurring in the company’s downsizing. Outsourcing
will continue the smooth functioning of the business
regardless of the industry and its scope of work.

https://www.rkfoodland.com/what-are-the-benefits-of-outsourcing-supply-chain-manage
ment
/
Extends Resources:

It is not feasible for every business to access

every essential tool and resource and keep the
business running smoothly. However, with
changes in times and trends in supply chain
management, it becomes necessary to keep up
with the upgraded technology and equip the
system with the latest integrations. As a robust
solution that caters for all logistics needs,
outsourcing supply chain management helps
businesses with additional resources, expands
their capabilities, and promotes efficient
working beyond the scope of the business.
Increased efficiency
Choosing an outsourcing company that specialises in the
process or service you want them to carry out for you can
help you achieve a more productive, efficient service, often
of greater quality.
Increased reach
Outsourcing can give you access to capabilities and facilities
otherwise not accessible or affordable.
Greater competitive advantage
Outsourcing can help you leverage knowledge and skills along
with your complete supply chain.
Outsourcing can also help to make your business more
flexible and agile, able to adapt to changing market
conditions and challenges while providing cost savings and
service level improvements.
Pros of Outsourcing
It has proven to be an effective measure of distributing
resources to the companies where they can effectively
utilise them, which means allotting tasks to those
companies that are specialists. Moreover, it enables the
company to complete their tasks for lesser money.
Outsourcing allows the companies to focus on more
important things after allotting others to the third party.
Outsourcing has been an excellent choice for Apple. It
only focuses on developing new software and designs and
outsources its components to the other parties. Thus, we
can say that it can be a very effective technique for
business and competition if appropriately managed.

https://economictimes.indiatimes.com/definition/Outsourcing
Cons of Outsourcing

It has been a cause of the loss of several

domestic jobs, especially in the manufacturing
sector. As the outsourced services are not in
complete control of the company, it can lead to
the production of lower quality products or
services. Moreover, there could be a delay in
completing projects due to a lack of
communication between the company and the
third party. Signing agreements for it with other
companies take extra effort and time. If the
third party has access to confidential
information, then it can be a severe threat to
the company outsourcing.
 Disadvantages of outsourcing

Outsourcing involves handing over direct control over a

business function or process to a third party. As such, it
comes with certain risks. For example, when outsourcing,
you may experience problems with:
•service delivery - which may fall behind time or below
expectation
•confidentiality and security - which may be at risk
•lack of flexibility - contract could prove too rigid to
accommodate change
•management difficulties - changes at the outsourcing
company could lead to friction
•instability - the outsourcing company could go out of
business

https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-outsourcing
https://www.cio.com/article/272355/outsourcing-outsourcing-definition-and-solutions.html
 Third-Party Logistics

Third-party logistics, also known as 3PL, are external service

providers for logistic requirements such as warehousing,
distribution, packaging, and more. These providers specialize in
such operational areas. They can customize their services to
scale as per the demand and needs of their customers based on
various factors. These could be internal business-related factors
or external ones which are beyond a customer’s control.
 What are the Services Provided by 3PL
Companies?

Warehousing

This process begins as soon as your business delivers the final

product to the 3PL, their part of the service begins. A 3PL may also
collect the goods from your factory or warehouse and charge you
for the transport. Before your customers place an order the
products are stored in the third-party logistics warehouse. This is
where your product is stored in inventory and is entered into
warehouse management software.
 Continued…

An SKU code is assigned to the products, which identifies

where the product is placed in the warehouse. Be it on a
shelf, floor, bin, or pallet the code on the SKU helps identify
this. Once coded into their system, the product is visible
via their software and can also reflect on your software such
as Browntape which can sync these warehouses to give you
an overview of your whole business. It is then up to you to
see which of these SKUs reflect on your online store. Take
note that some 3PL providers allow you to customize the
handling, distribution, and transportation process to a
higher extent than others.
Inventory Management

For some 3PL companies managing, inventory doesn’t

just involve keeping a track of the products
warehoused. But it includes integrating the products
with your eCommerce store, synchronizing the
inventory levels at each fulfillment checkpoint, and
lastly to reorder the inventory to ensure that there are
no stockouts.
 Continued…

These are end-to-end service providers and this supply chain

design works well for eCommerce sellers or D2C businesses
which have just one or two sales channels online. As the
number of channels or marketplaces increases, you may have to
start using an inventory eCommerce management software like
Browntape. Your 3PL service provider might also be doing the
same.

Any eCommerce inventory management software allows you to

keep an eye on the stocked inventory. You can also get data as
to how many units were sold per day. Besides this, as per the
3PL’s technology and workflows you can have access to and
manage the real-time stock counts on the store’s website. This
helps display to your customers in case any item is out of stock.
Picking and Packing
This is where the fulfillment process officially starts. This step is
called the pick-and-pack fulfillment phase. Some 3PL have systems
that integrate into an eCommerce aggregation platform such as
Browntape. Which is then linked back to 3PL fulfillment software,
to have all the orders, shipments, inventory tracking, and stock
levels all in one place. This makes the whole process easier rather
than manually updating a spreadsheet with the order details and
so on.

Now when an order is placed, it is passed on to the warehouse

picking team; who further collects the order from the locations in
its respective quantities and is further passed on to the packing
team. As the name suggests this team gets the order ready for
shipping. The packing entirely depends on what is offered as well
as what your brand prefers.
Commonly used packing materials are:

Polybags
Unbranded boxes
Packing tape
Paper-based dunnage
Bubble mailers/wrap

As per your choice of packing material, you will be

charged separately or this might be included in your
fulfillment package. Since they are the experts in this
area the third-party providers will recommend and
offer you the best options for shipping. Keeping in
mind the possible damage and the practical
volumetric weight. Since volumetric weight is how
the shipping company charges the company.
Shipping and Receiving

Your 3PL providers focus on the management of the shipping task

right from start to finish. This means that the packing team will
purchase, print, and stick the required shipping labels on your
behalf. Now you have to keep in mind that some 3PL have
preferred shipping partners. While there are some who compare
the shipping cost and choose the most affordable pricing possible.

The latter choice would be a better choice. Such 3PL providers

keep in mind the customer’s delivery speed and package size to
offer you the most affordable option.
Shipping carriers such as the following can be opted
for by your 3PL providers:

Aramex Courier Company

Blue Dart Courier Services
Delhivery for Courier Services
DHL Shipping Company
DTDC Courier Company
FedEx Courier Partner

These carriers will directly pick up the orders from the

warehouse and ship them as per the mentioned speed and
policies selected by the customer. Once this is done your
warehouse management software using API will push the
tracking information to your eCommerce business. From
which even your customer can easily track and receive the
order.
 Kitting and Customization

As a plus point, you can check with your third-party

logistics provider if they allow or offer your business
special packaging options. This is in the case of
customized gift wrapping, subscription boxes, and so on.
If your third-party provider allows it then you could
offer and gain an advantage over your competition.
Although this would cost you a bit extra, it is possible
that 3PL offers such services too.
 Reverse Logistics (Returns)

It is obvious for a business to expect a few returns. And your 3PL

provider can deal with returns as well. As you would be aware,
they term it as reverse logistics since the item is sent back to the
warehouse. Also known as RTO or return to origin. The shipping
team will include a return shipping print label to make it easier to
be sent back to the warehouse.

Once the item is received back to the 3PL, the providers will
dispose of the item depending on the policies and preferences of
your business. If not disposed of the item will be refurbished or
repacked and returned to the “good” stock inventory. The service
offered by the 3PL makes it convenient for your business to
handle returns and therefore make sure to have a reversed
logistic strategy in place.
 Benefits of Using 3PL

1. Reduces Cost and Saves Time

3PL, being a business that has a large role to play in the supply-chain
ecosystem, has better connections compared to individual shippers. Thus
they can negotiate and avail better discounts depending on the bulk volume
as well as the frequency of orders, as they have other customers apart from
you This results in your eCommerce business reducing warehouse and
shipping costs.

Furthermore, in the long run, your business would also be saving on the
price you would be paying for labor, expanding inventory space, and other
such needs. As for saving time, with the logistic task transferred to a 3PL you
are left with more time on your hands. Therefore allowing your business to
focus on core issues.
2. Gain Flexibility and Scalability

While your business won’t always have an all-time high

demand, hence the need to scale upwards or downwards
depends on the demands of the market. Therefore
appointing a 3PL ensures that there is no need to commit a
fixed capital on redundant and unutilized resources. And you
can change your inventory needs as per the market
demands.
3. Tap into Industry Expertise

Appointing a third-party logistic provider for your business

can bring to you the needed knowledge in this area. Even if
you aren’t well versed with the process, your provider will
have the needed experience, and skill to deal with
situations that might arise. They will have the required
knowledge on the required documentation, import and
export connect, international export compliance, and
economic regulation compliance helping you with the
process.

Besides, you wouldn’t need to hire specialized personnel

for this matter. This allows your end product to reach
customers well in time and without any hassle. Right from
labeling to completing the delivery.
 4. Enables Business Growth

One of the key goals that you can achieve from

outsourcing to 3PL is that you can focus on the
growth of the business and consider market
expansion. By prioritizing your core competencies
you can establish areas in need of improvement
and growth. Testing new markets and areas could
be your main focus. Leaving most of the tedious
tasks of management to the professionals.
 Cons of Using 3PL

1. Loss of Control
When you appoint a third party to take care of your
logistics and shipping, you’re handing over a certain
amount of control to the 3PL providers. As a business, you
need to take a leap of faith that the functioning of these
services will positively impact your customer satisfaction.

https://browntape.com/what-is-third-party-logistics-in-india/
 Continued…
Since you can’t overlook the process to ensure that
everything is in order, this serves as a drawback. Although
you can use various integrated EDI software to keep track
of the orders being processed. But also need to ensure
that you are using software that is on par with the
information being updated accurately. Some softwares
that are used by various 3PL providers include:

Cleo Integration Cloud

SPS Commerce Fulfillment EDI
TrueCommerce EDI
MuleSoft Anypoint Platform
Jitterbit
2. High Initial Cost
When you are just starting off with adopting 3PL the
upfront investment may seem large. This cost goes into
setting up the infrastructure for your business.
However, in the long run, it is effective. If you are a start-
up and do not have as many orders and the
warehousing facilities are too expensive, opting for 3PL
can be prohibitive.

But also take into consideration that if you hold back

and try to skimp through the cost this could hurt the
way your customers see your company, in turn hurting
your initial profits. Therefore instead of a loss
eventually, investing in a reputed 3PL provider will boost
your customer satisfaction as well as profits.
3. Bad Service Hampers Company Image

While your company adopts the 3PL services

there is a relationship of trust formed. For your
customers, this relationship remains unknown.
Therefore any mishaps that might occur, be it
delay or shipping damaged goods, this directly
reflects on your brand. Hence this makes it your
duty to ensure you are entrusting a reputed and
experienced third-party logistics provider
 FOURTH-PARTY LOGISTICS

Fourth-party logistics, also known as 4PL, is an

operational model in which a business outsources its
entire supply chain management and logistics to one
external service provider.

Unlike a third-party (3PL) provider, which oversees

part of supply chain operations for a business, a 4PL
provider is usually the single point of contact for
supply chain management. This provider has a
broader scope of responsibilities that include
managing resources, technology and infrastructure
and providing strategic insights and management.
 4PL:
Some of the advantages of 4PL include:
• Access a single point of contact for all vendors involved in the
supply chain.
• Back-end system integration of logistics processes with other
business functions.
• Reduced procurement costs and order cycle times.
• Standardization and automation of inbound, outbound and reverse
logistics.
• Access to a broader base of suppliers, ensuring lower costs of
transportation.
• Increase market transparency for goods and services.
• Reduced inventory wastage and inventory write-off costs.
• Greater visibility over the entire supply chain.
• Leverage strategic insights to create a lean and cost-effective
supply chain with an improved profit margin.
https://www.selecthub.com/warehouse-management/4pl/
Disadvantages of 4PL include:

• Can be cost-restrictive for small businesses

and organizations.
• Offer little control over fulfillment and logistics
processes.
STAGES OF 4 PARTY LOGISTIC:

Reinvention
Transformation
Implementation
Execution
Cost Effectiveness of Fourth-Party Logistics

1. Revenue growth by enhanced product quality,

product availability, and improved customer service-
all facilitated by the application of leading
technology.
2. Operating cost reduction can be achieved through
operational efficiencies, process enhancements and
procurements. Savings will be achieved by complete
outsourcing of supply chain functions and not just
selected components.
3. Fixed capital reductions will result from capital asset
transfer and enhanced asset utilization. The fourth-
party logistics organization will own its physical
assets through freeing up the client organization to
invest in core competencies.
3LP; 4LP: https://youtu.be/3ZzUBHrsTKA
https://www.warehouseanywhere.com/resources/3pl-vs-4pl-
logistics-definition-and-comparison/
 Recent Trend

https://www.warehouseanywhere.com/resources/3pl-vs-4pl-
logistics-definition-and-comparison/
1PL - First-Party Logistics

An enterprise that sends goods or products from one

location to another is a 1PL. For example, a local farm
that transports eggs directly to a grocery store for sale is
a 1PL.

2PL - Second-Party Logistics

An enterprise that owns assets such as vehicles or planes
to transport products from one location to another is a
2PL. That same local farm might hire a 2PL to transport
their eggs from the farm to the grocery store.

https://www.warehouseanywhere.com/resources/3pl-vs-4pl-logistics-definition-and-compariso
n/
3PL - Third-Party Logistics

In a 3PL model, an enterprise maintains

management oversight, but outsources operations
of transportation and logistics to a provider who
may subcontract out some or all of the execution.
Additional services may be performed such as
crating, boxing and packaging to add value to the
supply chain. In our farm-to-grocery store example,
a 3PL may be responsible for packing the eggs in
cartons in addition to moving the eggs from the
farm to the grocery store.
4PL - Fourth-Party Logistics

In a 4PL model, an enterprise outsources

management of logistics activities as well as the
execution across the supply chain. The 4PL provider
typically offers more strategic insight and
management over the enterprise's supply chain. A
manufacturer will use a 4PL to essentially
outsource its entire logistics operations. In this
case, the 4PL may manage the communication with
the farmer to produce more eggs as the grocery
store's inventory decreases.
5PL - Fifth-Party Logistics

A 5PL provider supplies innovative logistics

solutions and develops an optimum supply chain
network. 5PL providers seek to gain efficiencies
and increased value from the beginning of the
supply chain to the end through the use of
technology like blockchain, robotics, automation,
Bluetooth beacons and Radio Frequency
Identification (RFID) devices.
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