About The 5PL Logistic Supply Network.pdf

The Difference Between 4PL vs 5PL Logistic Supply Model

1. LOGISTICS
Supply Chain
Shantanu Bhadkamkar
Regional Conference
WIRC
ICAI
Industry Growth, Opportunities, Challenges
Government Policies & Initiatives
Role Of Chartered Accountants

2. “Logistics service providers should join logistics
clusters and actively collaborate with transport
infrastructure operators, governments and
academia. Players in the logistics arena should
establish
and foster knowledge exchange and management
across company borders.”
Transportation & Logistics 2030
Price Waterhouse Coopers 2010

3. LOGISTICS-Supply Chain
Govt. Policies/Initiatives, challenges and
opportunities. The expectation is how is the
industry growing, what are the opportunities,
challenges and if chartered accountants can
play roll.

4. •“Businesses no longer compete, its Supply
Chains that compete!”
–Professor Martin Christopher
•In 2010 Transport Intelligence identified India
as the world’s most important growing
logistics market

5. “the absence of a single logistics 'champion' (whether in
form of a ministry or otherwise) in the
government (or industry) led to a disintegrated approach
to development of the sector. Extensive
fragmentation meant the incapacity of industry players to
develop the industry as a whole and poor
support infrastructure, such as roads, ports and telecoms,
led to a situation where the opportunity to
create value is limited.”
Skill gaps in the Indian Logistics Sector
KPMG & CII 2007

6. “India will require a National Integrated Logistics Policy (NILP).
Such a policy should target a greater
share of rail, reduce economic waste and improve energy
efficiency. The policy will need to establish
and implement targeted national programmes including
dedicated freight corridors, coastal freight
channels, national expressways, last-mile roads, last-mile rail,
multi-modal logistics parks, road
maintenance, technology adoption, skills development, and
equipment & service standards”
Transforming the Nations Infrastructure
McKinsey 2010

7. “Logistics service providers should join logistics
clusters and actively collaborate with transport
infrastructure operators, governments and
academia. Players in the logistics arena should
establish
and foster knowledge exchange and management
across company borders.”
Transportation & Logistics 2030
Price Waterhouse Coopers 2010

8. What is LOGISTICS
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2024
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Logistics is the process of planning, implementing, and controlling
the efficient, effective flow and storage of goods, services, and
related information from point of origin to point of consumption for
the purpose of conforming to customer requirements.
Reference: Council of Logistics Management, http://www.clm1.org/mission.html, 12 Feb 98
Note that this definition includes inbound, outbound, internal, and external movements, and return
of materials for environmental purposes.
Logistics (CEN)The planning, execution and control:
•of the movement and placement of people and/or goods
•and of the supporting activities related to such movement and placement
within a system organised to achieve specific objectives
CEN : European Committee for Standardization (Comité Européen de Normalisation in French)

9. Wednesday, September 18,
2024
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Logistics Objectives
Right Place
Right Documentation
Good Condition
Right Price
Right Time
Right Tariff
Smooth
Movement
Online
Information

10. Outsource Logistics
•We want to outsource logistics :)
•Shippers never owned bullock carts, ships,
railways etc
•What is envisaged is outsourced
management.

11. CONSILIENCE
JARGON & ACRONYMS
1PL - XPL
Definition Depends on whom you ask
As many experts as many definitions
DISCLAIMER
You have 2 Economists, you have 3 Opinions.

12. Parties
•1st Party: The Supplier
•2nd Party: The Company buying the product that is being
stored or shipped
•3rd Party Logistics Provider (3PL): The company that
provides warehousing and transportation outsourcing
•4th Party Logistics Provider (4PL): The majority of people
would agree that 4PL is little more than logistics consultant,
but nevertheless here is the official definition courtesy of
Accenture:
‘A 4PL is an integrator that assembles the resources,
capabilities, and technology of its own organization and
other organizations to design, build and run comprehensive
supply chain solutions.’

13. What is 5PL
•5PL is the alignment of individual supply
chains into a common network strategically
managed by a single body
•Therefore the fifth party itself is not (necessarily) a physical
entity but a system that informs a controlling party which in
turn manages the various supply chains in the network on the
basis of real time information and pre-aligned logistics facilities
such as transport, shipping, storage etc.
Supply Chain
1
Supply Chain
2
Supply Chain
3
Supply Chain
4
Supply Chain
5 RM
FINISHED
GOODS
CONSUMER

14. INTEGRATION
SUPPLY CHAIN
LOGISTICS
INTEGRATION
COST TIME
TRANSIT WAITING OBSTACLES
RELIABILITY RISKS

15. LOGISTICS INTEGRATION
•SEAMLESS MANAGENT
•REAL TIME MONITORING
•VISIBILITY
•TRACEABILITY
•SYNCHRONISATION
•MULTI TIER
CHARACTERISTICS
•GLOBALISATION OF MARKETS
•INCREASED COMPETITION
•TECHNOLOGY
•PARTNERSHIPS
•INFRASTRUCTURE
•VENDOR & CUSTOMER DEMANDS
DRIVERS

16. What Is 7 PL?
7PL = 3PL + 4PL

17. What Is 3PL + 4PL
3PL + 4PL = ?
Same as 3½PL
NONSENSE
OR
SOMETHING I DON’T KNOW YET

18. CHA
Customer Definition
Why buy a cow, when the
milk is free?

19. Heard in Europe
Some Bankrupt Forwarders are now Consultants.
They work on Commission based on COST
REDUCTION.
They Call themselves 4PL

20. 4PL = Asset Free
Is only asset free enough?
3PL Paved Way For Outsourcing
New BPO, Lead
Logistics
Focuses On
Process Rather
Than Task
Fills Service Vacuum created by 3PL
4PL is NeutralBrings Value
ReEngineered
Approach

21. RECIPE
VISION
•BUILD ON CORE
COMPETANCIES
KNOWLEDGE
•KNOW HOW
•EXPERIANCE
TECHNOLOGY
INVESTMENT
•PEOPLE
•PROCESSES
IMPLIMENTATION
•NEUTRAL
•COMMITMENT
•PARTNERSHIP

22. 3PL
Carriers
•Airlines
•Shipping Lines
•Rail
•Truckers
•Courier
•Post
Infrastructure
•Port
•CFS
•Warehouses
•IT
Customers
•Buying Agents
•Manufacturers
•Merchants
Organisors
•CHA
•IATA
•MTO
•NVOCC
•Liner Agents
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CONVERGENCE IN LOGISTICS

23. EMERGING TRADE & INDUSTRY ISSUES
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Pricing, Costing,
Forecasting, Feed
Back
MIS, Response
Management
Concept Selling &
Enhanced Role
Of Marketing
Ability To Handle
New Unexpected
Situations
Dealing With
Uncertainty
Global Alliances
& Strategic
Networking
Better
Management Of
Finances
Strategic Global
Vision
Quicker
Delivery
Lower Cost
Superior
Service
Range
Flexibility Visibility
TraceabilityIntegration

24. Influencing Factors
Technologies
•Information
Management
•Full Integration
with
Customer’s ERP
•Middle Ware
•RFID, Bar
Coding …
Enhanced Safety
Standards
•Hazards
•Accidents
•Health
•Safety Culture
•Monitoring,
Review &
Audit
Security
•Domestic
•International
•Storage
•Carriage
•Personnel
Environmental
Issues
•Statutory |
Compliance
•Packing
•Green Logistics
•Reverse
Logistics
•Carbon Credits
Fuel
•Costs: Rise &
Volatility
•Particularly
Fossil Fuels
•Peak Oil
•Alternative
GLOBALISATION
•Opening Of
Markets
•Global
Manufacturing
•Various Local
Laws
•Various
International
Conventions
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September 18, 2024
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- ATC
24

25. 4PL & 3PL OPPORTUNITIES
•Competition, cost worries and strict delivery
schedules are forcing companies to focus on
core competencies & outsource their logistics
Management to third-party vendors.
•About 75% of the companies in the US use 3PL
providers, while India has just made a start

26. OPPORTUNITIES
•GDP Growth ~ 5%
•Logistics Growth Rates Above GDP
•Above Average Market Valuations
•Integration With Supply Chains
•New Models, New Services, Emerging Field
•BRAND INDIA
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2024
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27. Marketing
•More Sales …
•Sales By Non
Sales
Personnel
•Brand Equity
•Increased
Customer
Focus
Cost Saving
•Discretionary
Expenses
•Greater
Efficiency
•Re-
Engineering
Strategic
Investments
•People -Talent
Search
•New Services
•Assets
•Up Value
Chain
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2024
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READY FOR NEXT UPSWING
… but Competitors are also doing the same

28. CA
Credit
Management
•Bank !
Contracts
Prudence
•Risk Mitigation
•Viability
M & A

29. As Peter Drucker called 3 decades back is
Logistics still the last great unexplored
continent of business?
Growth – Opportunities - Challenges
SHANTANU BHADKAMKAR