Recent Trend in Logistics

物流的新趋势

Contents

1 Third-party logistics

2 Outsourcing

3 Benchmarking

4 Virtual warehousing

Third-party logistics

Categories of TPL

Standard 3PL provider Service developer The customer adapter The customer developer

Reasons for using third-party logistics

To reduce operating costs of manufacturers To strengthen core competency Resources are limited There is insufficient time to develop the

required logistics capabilities in-house

Reasons for using third-party logistics

The company is venturing into a new business with totally different logistics requirement

Merger or acquisition may make outsourcing logistics operations more attractive than to integrate logistics operation.

Advantages of TPL

Improve global capability Reduce cost Achieve environment objectives Enhance security Improve quality Speed process change

TPL in China

The development level of TPL in a nation may reflect the overall level of its logistics industry.

In the U.S., the companies using TPL services completely account for 77%; in Europe, 79%; in Japan about 80%. But in China, the percentage of using 3PL is lower. There is a great potential for TPL’s development in China.

Raw Materials Logistics Operation

Finished Goods Logistics Operation to Industrial Goods

Commercial Goods Logistics Operation

Case Study — China Container Shipping Corporation provides TPL services for ABC foreign company

Using TPL service

Group Discussion

How about Haier Groups?

1. Background of Haier

2. Advantages and disadvantages of logistics operations in house by the Haier groups

3. How about the orientation of logistics of Haier Groups?

Outsourcing

Definition Difference between TPL and Outsourcing Traditional logistics and contract logistics

Differences between traditional and Contract logistics

Traditional Services Contract Services

Not tailored Tailored

Usually one-dimensional or warehousing for example

Are multi-dimensional, linking transportation, warehousing, inventory management, systems and others

Shippers aim to lower transportation cost

Goal is to lower total cost while providing better service and more flexibility

Contracts tend to be temporary Contracts are more likely to be of longer duration

Require expertise in, say, transportation Requires broad broad logistics and analytical skills

Contracts generally takes less time to negotiate

Contracts generally take more time to negotiate

Simpler arrangement and relatively low switching costs

Complexity of arrangement leads to higher switching costs

Benchmarking

What is benchmarking What’s the use of benchmarking Recent research findings

What is benchmarking

Benchmarking refers to the act of comparing a company with world-class performers and competitors involved in similar functions and operations.

A conceptual framework for benchmarking

What’s the use of benchmarking

Benchmarking helps an organization to identify and learn the best practices in the world for process or a function

Benchmarking helps evaluate a firm’s strategies, operating plans and processes.

Recent research findings

Effective benchmarking is highly dependent on the general competitive attitude of a firm’s managers.

Firms that benchmark have a realistic view of their own capabilities. In other words, for many firms, “ignorance” ( 盲目乐观 ) and can possibly lead to complacency.(自满 )

Overall, the interview findings suggested that carefully managed benchmarking programs help firms improve their logistical performance.

Reverse Logistics

Definition Logistics and environment

1.Definition

Logistics include three dimensions: Material management covers all the functions from raw material

acquisition to production at plans; Distribution covers movement from plant to customers;

Forward logistics Reverse logistics deals with the handling, storage and movement of

materials that flows from the end customer back to the seller or supplier.

Materials: (1) returns, defectives; (2) recyclable waste: containers, boxes, packaging material; (3) non-recyclable waste: hazardous, toxic…

2. Reverse logistics and environment

The logistics industry is still not very “green”:pollution, congestion, resource depletion, etc.

Reverse logistics is a necessity for a firm’s operation and customer service policy. But few firms really think they should operate logistics in such a way as being able to improve the environment.

The problem of the recycling of used electronic products in China.

Please comment on the current policy stipulating private cars purchase.

3. Design of reverse logistics Reverse logistics flow may be synchronized with the forward

distribution flow for maximum efficiency, i.e. a pick-up of returns or packaging materials from a store should be scheduled with the delivery of products to that store.

The locations for recycling centers or the selection of recycling centers may be based on proximity to end customers where returns or packing materials are generated.

The design of the supply chain must include considerations related to reverse logistics such as location of landfills, incinerators and recycling centers, transportation of returns or packing materials and the type of containers to store and move products.