Data Collection Plan
A data collection plan is a detailed document. It describes the exact steps as well as the sequence that needs to be followed in gathering the data for the given Six Sigma project. This document is important because the people that design the data gathering plan are not the same people that will actually be […]
Voice of Customer (VOC)
The Voice of Customer is not a tool that is used in Six Sigma process. It is the underlying philosophy of the Six Sigma process which makes it ensures that the entire process improvement exercise is based on the need of the stakeholder group that matter most i.e. the customer. The Voice of Customer is […]
Human Resource Information System (HRIS): Meaning, Evolution and its Features
In the contemporary scenario of modernization and globalization, organizations heavily rely upon technological advancement and innovation in the field of Information Technology. Advancements in the field of IT has opened up newer avenues for the organizations and provided a competitive advantage by using innovative and customized solutions. It has become an integral part of the […]
The Singapore Growth Model
Singapore has been one of the great success stories of South East Asia. The country started with very little money or resources just a few decades ago and had built one of the best global cities today. Their success story is not similar to that of China or Hong Kong. The differences are remarkable. The […]
Recording the Inputs (Xs) at Actionable Level
The 5 why method or the Root Cause analysis method that has been described in the Tools section plays an important role in determining that the X’s are recorded at actionable level. In this implementation of the 5 why tool, there is a slight variation from the standard methodology and hence it has been explained […]
3PL Logistics Service Providers are many in the market. There are players from Multi National background, regional players, local companies and individually managed business organizations.
Warehousing business, on the other hand, can flow through warehouses, consolidation and merging centers, finished goods stocking points, forward locations, raw material warehouses, JIT/VMI operations, Bonded warehouses, in plant warehouses, etc. depending upon the business requirement.
In this section of the article, we proposed to cover pricing mechanism aspects of a small warehouse like a consolidation center or finished goods flow through warehouse that need not be dedicated to the buyer alone and can be a shared facility.
Normally the bigger operations involving inventory management etc. are considered stand alone facilities and costing is worked out for the entire project, and this part of discussion is not covered under the scope of this article.
Normally in the Finished goods supply chain or raw material supply chains, there would be a need for a warehouse facility en route to the plant or the markets. These warehouses can be consolidation centers or merging centers in case of finished goods where different components of the order or finished goods are brought in from various locations, merged and dispatched to the next leg of the network. In case of raw material supplies, there can be a consolidation center at a country level where all shipments from several buyers are consolidated and shipped out as a container load.
Such kinds of warehousing requirements may not call for dedicated facilities. Normally the 3PL service provider who manages the freight will have warehouses that are used as shared or common facilities. In few cases public warehouses are also used by the buyers as the case may be.
General cargo warehouses or shared facilities and public warehouses are warehouses that house cargo of various clients. Depending upon the clients requirements, materials can be stored per day, week or month, etc. Inventory held of each customer may not be very high.
Storage and space options provided by the 3PL in such cases can vary with the client’s nature of the business. In a country consolidation center, where multiple shipments are stored and consolidated, the buyer may contract a fixed space on square foot basis with specified number of locations.
In another case of a merging center, the buyer may not contract fixed space and pay on transaction basis.
Public warehouses normally rent out space in terms of per pallet storage.
Even in Fixed Fee model, there are many variations in pricing models.
Normally in transactional pricing model, the buyer’s requirement will be minimum and does not call for any specific or dedicated investments. The 3PL provider normally uses his general or public facility and recovers his total cost of investment and operations on the volume or transactions.
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