Party LOGISTICS

     As for smooth movement of goods in Supply Chain process is concerned, we can define a term called Logistics. Supply chain is process of transferring raw material into products and getting it to customers while Logistics deals with movement of material with the supply chain.

  Logistics is defined as movement of goods from the supplier to its consumers.

    We can define 7 Rs in the concept of logistics that means:

• getting the right product
• in the right quantity
• in the right condition
• at the right place
• at the right time
• to the right customer
• and at the right price

  There are several functions that plays a major role in movement of products to its customer considering all the seven Rs that are transportation system like airlines, ships, roadways and railways and another one is warehousing the product so that it will be efficient to transport or movement of goods.

   Concerning these two function, we can define two way of transportation of goods one is Inbound transportation and second one is outbound transportation. Inbound movement to products deals with movement of product from manufacturing house to warehouse, it is a type of intra operational function while outbound movement deals with movement of goods from warehouse to custom shops or direct customers. Few of companies refer only movement of goods directly to the end customers, so on the basis of this, we can define party logistics for studying which party is involved in movement of goods from supplier or producer to its consumer or end customers.

  There are basically 5 types of party logistics system that are the evolution of previous one, they are as follows:

• 1PL
• 2PL
• 3PL
• 4PL
• 5PL

We will discuss about these party logistics in brief,

• 1PL (1st Part Logistics):  Self Management of Logistics, it involves a company that manufacture its goods and completely responsible for movement of that goods to its customers. It does not requires any medium to supply their products.

         example; a local farm that transport eggs directly to the grocery store for sale

• 2PL (2nd Party Logistics): An assets based carrier, it requires a third party transportation system for movements of their goods to the end customer. Transportation system may be of any kind.

         examples; courier system which takes parcels from the customers and deliver it to their receivers

• 3PL (3rd Party Logistics): Party or absolute outsourcing of Logistics Services, it involve a medium that are going to handle logistics function of the company it involves warehousing and transportation both to maintain the sufficient movement of goods and services. In this process several value addition process are done like packaging, boxing and crafting.

         examples; Let a farmer wants to sell his vegetables to the supermarket then he will hire some logistic provider that is responsible for store that vegetable as an inventory and further                             packaging is done and then that logistics provider send it to supermarket.

• 4PL (4th Party Logistics): Supply Chain Management, it requires a medium that are going to manage its complete supply chain network for the movement of its goods and services. It includes warehousing, transportation and along with several logistic functions according to need and demand in particular region. A manufacturer will use a 4PL to essentially outsource its entire logistics operations.

          example; If a client going to hire for 4PL logistic provider, then that provider have to deals with all the process that are required to manage its supply network, They will be responsible for contacting transportation, warehouse, IT and all other process starts from                                procurement of raw material to provide end product to the customers, client only have to contact with the 4 PL provider.

• 5PL (5th Party Logistics): Logistics function for cost minimization, it requires a medium that supplies innovative logistics solution and develop an optimum supply chain network. the provider seeks to gain efficiency and increased value from beginning of supply chain to the end through the use of technology like block chain , robotics, automation and all. It is latest version of logistics providers.

        example;  If a client hires 5PL provider then that is not only responsible for planning, organizing and implementing logistic solutions but also negotiate rates with other service provider such as carriers, airlines, etc.. it gives the highest degree of resource utilization.

References;

          https://www.youtube.com/watch?v=ylAgKgjEepk&t=548s