The case study of 3PL: FedEx Supply Chain Solution

Sharon Kuo Silver Lu RA7951021 RA7951055

Jon Dickerson RA6967118

Content Introduction_3PL Current 3PL market A case: FedEx Supply Chain Solution
Introduction and express service Logistics Distribution Centre Operations Integrated Information Technology

Introduction _3PL
Definition Relationship between a shipper and third party with customized offerings Encompasses a broader number of service functions by a long-term and mutually beneficial relationship. Typically specialize in integrated warehousing and transportation services
(By Alfrick and Calkins, 1994 and P. Murphy and R. Point, 2000).

Main goals of 3PL Improve service levels Reduce costs

Four categories of 3PL provider

High

Service developer
Offers advanced value-added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. Focus on IT and Economies of Scale

Customer developer
Highest level of 3PL can attain. It integrates itself with few customer and takes over their entire logistics function with extensive and detailed tasks

Complexity of Service

Standard 3PL provider

most basic form of a 3PL provider and performing basic functions like pick and pack, warehousing, and distribution business

Customer adapter
Upon customers request and essentially takes over com-plete control of the companys logistics activities. It Improves the logistics dramatically, but do not develop a new service

Low

Customer Oriented

High

Hertz, S., & Alfredsson, M., (2003), Strategic development of third party logistics providers,

Current 3PL market

The global third-party logistics (3PL) industry is now estimated at $390 billion Shippers are turning to their 3PLs more than ever to stretch operations into unfamiliar regions of the world Healthy market with 7-8% growth and lots of activities in some emerging economies, most in Eastern Europe

A case: FedEx Supply Chain Solution

Consolidated sales, marketing and information technology supporting a single, global FedEx brand
Memphis, Tennessee

Time-definite express delivery

Tower Group International Custom brokerage/consulting

Exclusive-use, expedited, door-to-door delivery

Regional LTL Carrier (Americas)

We Can Support You Worldwide

A comprehensive suite of solutions for cost efficiency Copy and printing services high-speed Internet access

More than 220 countries

FedEx International Flight Network

Found in 1971 Worldwide: Memphis, Tenn. Asia Pacific: Hong Kong Approximately 3.5 million packages daily 670 aircraft More than 141,000 employees worldwide

FedEx Transportation Services

IP

Shipper
Federal Ex press

Consignee

1-2 Days Door-to-Door

Consignee

IPD

Shipper
Federal Ex press

Consignee

2-3 Days Door-to-Multiple Door

IE

Shipper
Federal Ex press

Consignee

3-5 Days Door-to-Door

Logistics Distribution Centre Operations

Worldwide LDC Locations
PRESTWICK NEWARK MEMPHIS SANTA CLARA SINGAPORE LEICESTER PARIS EINDHOVEN BEIJING TOKYO TAIWAN SUBIC BAY

SHANGHAI DUBAI HONG KONG

USA Memphis Atlanta Chicago Newark Baltimore Los Angeles Santa Clara

EUROPE Leicester Prestwick Eindhoven Paris Stansted Dubai

ASIA PACIFIC Singapore Philippines Hong Kong Japan Indonesia Thailand Korea Taiwan China

FedEx Asia-Pacific RDCs

South Korea China Kuro Beijing Taiwan Shanghai Taipei Shenzhen Hong Kong Thailand Fotan Bangkok Tsuen Wan Chep Lap Kok Malaysia Kuching Singapore Changi South Philippines Subic Bay

Japan Tokyo Narita Osaka Fukuoka

FedEx Express has established a network of Distribution Centers in locations across Asia-Pacific specializing in Cross-Docking operations, Service Parts management, and other customized logistics applications.

FedEx RDC warehouse

Japan

Taiwan

Singapore

Tokyo RDC

Hukou RDC

Changi South RDC

Korea

USA

Europe

Kuro RDC

Memphis GDC

Eindhoven RDC

Taiwan RDC locations Luchu RDC Yangmei RDC Hukou RDC Kaohsiung RDC

FedEx RDC Operations

FedEx RDC Services
Headquarters

Inventory Control & Management Order Fulfillment (Traditional or WebEnabled)

Order Information

Retailers

Distribution Management / Transport Management Reverse Logistics Cross-Docking/Consolidation Information (Inventory Visibility) Kitting Other Specialized Services: Reconfiguration, ESD Handling, Repacking, Labeling, Quality Checking, Ticketing, Price Tagging, Local Compliance, etc.

Customer

Wholesalers

End User

End User

Suppliers

Repair Center

FedEx RDC Benefits

Low Risk/Low Cost Start Up Variable Costing No Capital Requirement / People Obligations Global WMS/Warehouse Management System maintenance Supply & Delivery Chain Management Total Inventory Visibility Facility/manpower/equipment cost saving Convenience and Reliable

Example of current TWRDC customer

Time-Critical Delivery & Asset Recovery to Improve Turn-Around-Time for Repair Parts
Repairable Parts Order

New Parts Replenishment

SPL Customer

FedEx RDC

RDC Parts Management

Repaired Parts Return

Good Parts Dispatch

Defective Parts Return

Rapid Order Processing upon receipt of Repair Parts Order Defective Parts receipt and return to Repair Center Receipt of Repaired Parts Pipeline Data Track and Trace

Repair Center

Repair Work

Defective Parts Return Improved TAT

Local Customers

What is FedEx CIL_

Critical Inventory Logistics Critical Inventory Logistics Time-Definite Delivery of Spare Parts, Consumable Parts, & Repair-and-Return

Repaired Part

FedEx Facility

Good Part

Repair Center

SPL Customer

Defective Part

Ensuring the Right Part is in the Right Place at the Right Time

Express Parts Replenishment Time-Critical Consumable Parts Delivery to Expedite Time-to-Machine

Consumable Repair Parts
FedEx RDC
Overseas Customers

Rapid Order Handling at EDC

Replenishment

Rapid Order Processing upon receipt of Repair Parts Order Express Parts Replenishment of Consumable Repair Parts 2-4 Hour Local Deliveries on a 24 x 7 x 365 On Call Basis

Consumable Repair Parts

Local Customers

Repair Parts Order

SPL Customer

Repair Parts Order

2 Hours 24 Hours Domestic Delivery 24 Hours 48 Hours International Delivery

FedEx APAC RDC Customers

Integrated Information Technology

FedEx Insight (IP tracking)

Thanks for listening