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Why are Indian Corporates struggling? It would be an understatement to state that Indian Corporates are struggling. Saddled with huge debt that they accumulated and binged on during the “boom” years, they are now also facing the challenges of operating in a low growth environment wherein they can neither pay off the debt as they […]
Information System for Knowledge Management
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Cost Estimate and Accounting in ERP
The costing module is one of the important controlling modules which enables effective internal cost control and accounting. All functionalities regarding cost analysis and cost allocations are provided by this module. The cost accounting module is highly integrated with budget and general ledger modules as well as draws input and provides output to various logistics […]
Past and Current Directions in ERP
In keeping with technological changes in IT sector as well as evolving business need, there are discernable changes in ERP market as well. The traditional strength of ERP in back office space such as basic manufacturing, financial management, procurement and distribution, is still unchallenged. But the mind set is changing rapidly and ERP system providers […]
Introduction to Tally Software and Its Features
Introduction Tally is powerful accounting software, which is driven by a technology called concurrent multi-lingual accelerated technology engine. It is easy to use software and is designed to simply complex day to day activities associated in an enterprise. Tally provides comprehensive solution around accounting principles, inventory and data integrity. Tally also has feature encompassing global […]
Procurement Logistics, Manufacturing Logistics and Finished Goods Logistics functions are managed by different independent departments in a company. Though the duties of the departments involve common activities like transportation etc., however, the processes and nature of logistics functions are specific to each function besides the requirements and sensitivities of delivery times, schedules, etc.
With the emerging trends and availability of third party logistics providers has pushed the companies to adapt the practice of outsourcing all supply chain components and logistics functions termed as noncore functions to their logistics providers.
In this topic we shall examine the role and functions of Third Party Service Providers a little closely to understand how they make a difference to the supply chain activities.
Third Party Logistics field is a multi-layer or multi-tier integration of various players who have the niche segment expertise to manage any one or many functions of Logistics. In any Logistics Contract or Supply Chain Network, you will not find one single service provider being able to manage the entire chain of activities. You can have a lead logistics service provider who will further tie up with and manage other service providers to provide a single window service to the client organization.
At all levels, a lot of components of logistics get outsourced by these service providers to contractors and local players. Like for example in a contract logistics facility, the third party logistics provider who has secured the contract may not own and operate the facility himself. Labor is often outsourced along with other operations like Loading/ Unloading, Yard Management, Fleet Management, etc.
Logistics further also works with the concept of the 4Party Logistics providers in the market who take up large projects spanning huge volumes and multiple locations and services as the lead service providers. They draw up the operating plans, requirements, and specifications for the services and, in turn, choose the best service provider in each segment or function for each of the locations and thus manage to provide the entire gamut of logistics services to the customer.
Normally in Logistics, the lead players front ending the businesses would be the Freight Forwarders, Transport Companies (generally in long haul segment only) and Warehousing Service Providers. In many cases Freight Forwards own and manage warehousing facilities too.
Freight forwarders are those agencies who consolidate the cargo and book the cargo for onward freight using an airline or a shipping line or use ground transportation network including rail services wherever required.
Freight forwarders do not own any mode of transportation services. They book the space with airlines and shipping lines and negotiate the freight. They play the key role of providing origin and destination services coupled with single window client services using other third party service providers. Most of them also have in-house customs clearance division to support ground logistics operations.
Without the support of the freight forwarders who are multinational companies capable of managing your supply chain with ability to provide services in any country, any location across the globe, supply chain would not be able to function efficiently, for it is impossible for companies to coordinate and manage each leg and every activity in so many locations and manage so many vendors and interfaces.
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