Key words:

Logistics services, logistics activities, outsourcing, logistics services provider, 3PL provider

 Chapter objectives:

• explaining the concepts of logistics services and outsourcing,
• understanding the importance of logistics activities,
• getting acquainted with the term logistics services provider,
• acquiring knowledge about the term 3PL provider.

 Time required to study the chapter: 8 hours

 Interpretation:

Logistics services:

Logistics Services - are defined as personalized services provided by logistics providers intended to client companies (customers) in relation with outsourcing in logistics.

The main activities that are necessary for the smooth flow of products from the place of origin to the place of their consumption:

• Customer service
• Demand forecasting/planning
• Inventory management
• Logistics communications
• Material handling
• Order processing
• Packaging
• Parts and service support
• Plant and warehouse site selection
• Procurement
• Return goods handling
• Reverse logistics
• Traffic (transport) and transportation
• Warehousing and storage

 

Main services of logistics providers

• transportation,
• storage,
• customs services,
• financial services related to cargo,
• IT services,
• support services such as reverse logistics, etc.

Outsourcing:

Outsourcing literally means "taking resources from elsewhere", however, it is utilizing external entities for performing internal processes in the enterprise (hiring external companies for activities commonly used internally).

Logistics services providers:

LSPs Are divided into six groups in total, namely:

• Second Party logistics providers (2 PL),
• Third Party logistics providers (3 PL),
• Fourth Party logistics providers (4 PL),
• Fifth Party logistics providers (5 PL),
• Leading logistics partners (LLP),
• Courier, express and parcel services providers (CEP).

1. Providers 2 PL - a company orders individual logistics services from LSP.

2. Providers 3 PL - take over complex implementation of a part of the logistics chain and ensure its result. Their own logistics infrastructure, i.e. the transport network and logistics centers are typical of providers at this level.

3. Providers 4 PL - offer comprehensive services including analysis, project solution, implementation and management of the whole logistics chain.

4. Providers 5 PL - the principle of their operation consists in the virtual providing comprehensive logistics services.

5. LLP - these providers take over from their client company all production plants management, including the mutual alignment of logistics chains in the automotive industry.

6. CEP - the offer of their services is wide; from the delivery of letters, documents, to packing, insurance, delivery confirmation, etc.

 

At present, following categories of logistics services providers are of particular importance:

• Transport operators;
• Carriers;
• Forwarders;
• Courier, express and parcel services providers;
• Third Party Logistics – 3PL;
• Fourth Party Logistics – 4PL.

 Study materials:

Basic literature:

NOVÁK, R., ZELENÝ, L., PERNICA, P., KOLÁŘ, P. Přepravní, zasílatelské a logistické služby. Prague: Wolters Kluwer a. s., Czech Republic. 2011. 392 p. ISBN: 978-80-7357-735-3.

PERNICA, P. Logistika (supply chain management) pro 21. století. 2. ed. Prague: Radix s.r.o., Czech Republic. 2005. 536 p. ISBN 80-86031-59-4.

Recommended study materials:

LAMBERT, Douglas M, James R STOCK a Lisa M ELLRAM. Logistika. In: Praxe manažera. ed. 2. Brno: CP Books, Czech Republic. 2005. 589 p. ISBN 80-251-0504-0.
 

Questions and tasks

1.    The main activities that are necessary for the smooth flow of products from the place of origin to the place of their consumption do not include:
Order processing 
Market services 
Procurement

2.     Main services of logistics providers do not include:
Implementation logistics
IT services
financial services related to cargo

3. Provider 3PL:
   takes over partial implementation of financial services
   provides only transport and forwarding services
   takes over complex implementation of a part of the logistics chain and ensure its result

4.     Outsourcing means:
providing manufacturing and assembly services 
providing assembly services and customs services 
utilizing external entities for performing internal processes in the enterprise

5.  At present, specific categories of logistics services providers are of particular importance. These do not include:
Courier, express and parcel services providers 
Carriers 
Agents of shipowners

 

 

Key to solve the questions:

1.      B

2.      A

3.      C

4.      C

       5.     C