Fed Ex

The case study of 3PL:

FedEx Supply Chain

Solution

Sharon Kuo RA7951021

Silver Lu 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

Complexity

of Service

Customer Oriented

Customer developerCustomer developerHighest level of 3PL can attain.

It integrates itself with few

customer and takes over their

entire logistics function with

extensive and detailed tasks

Service developerService 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

Standard 3PL providerStandard 3PL providermost basic form of a 3PL

provider and performing basic

functions like pick and pack,

warehousing, and distribution

business

Customer adapterCustomer adapterUpon customer’s request and

essentially takes over com-plete

control of the company’s

logistics activities. It Improves

the logistics dramatically, but do

not develop a new service

High

LowHigh

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

We Can Support You Worldwide

Time-definite express delivery

Memphis, Tennessee

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

Consolidated sales, marketingand information technologysupporting a single, global FedEx brand

Tower Group InternationalCustom

brokerage/consulting

Regional LTL Carrier (Americas)

A comprehensive suite of

solutions for cost efficiency

Copy and printing services

high-speed Internet access

A case: FedEx Supply Chain Solution

More than 220 countries

FedEx International Flight Network

Found in 1971Worldwide: Memphis, Tenn.

Asia Pacific: Hong KongApproximately 3.5 million packages daily

670 aircraft More than 141,000 employees worldwide

FedEx Transportation Services

IP Shipper ConsigneeFederal Express

1-2 Days Door-to-Door

ShipperIE

ConsigneeFederal Express

3-5 Days Door-to-Door

Consignee

IPDConsignee

ShipperFederal Express

2-3 Days Door-to-Multiple Door

Worldwide LDC Locations

SUBIC BAY

TOKYO

SINGAPORE

PARIS

EINDHOVENPRESTWICK

LEICESTERNEWARK

MEMPHIS

SANTA

CLARA

DUBAIHONG KONG

USAMemphis AtlantaChicagoNewarkBaltimore

Los AngelesSanta Clara

EUROPELeicesterPrestwickEindhoven

ParisStanstedDubai

ASIA PACIFICSingaporePhilippinesHong Kong

JapanIndonesiaThailandKoreaTaiwanChina

TAIWAN

BEIJING

SHANGHAI

Logistics Distribution Centre Operations

Singapore

Changi South

China

Beijing

Shanghai

Shenzhen

Thailand

Bangkok

Philippines

Subic Bay

Hong Kong

Fotan

Tsuen Wan

Chep Lap Kok

Taiwan

Taipei

South Korea

Kuro

Japan

Tokyo

Narita

Osaka

Fukuoka

Malaysia

Kuching

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 Asia-Pacific RDCs

FedEx RDC warehouse

JapanTokyo RDC

TaiwanHukou RDC

Singapore

Changi South RDC

USAMemphis GDC

KoreaKuro RDC

EuropeEindhoven RDC

Taiwan RDC locations

Luchu RDC

Yangmei RDC

Hukou RDC

Kaohsiung RDC

FedEx RDC OperationsFedEx RDC OperationsFedEx RDC OperationsFedEx RDC Operations

Wholesalers

EndUser

RepairCenter

EndUser

Customer

Retailers

Order Information

• Inventory Control & Management

• Order Fulfillment (Traditional or Web-

Enabled)

• 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.

FedEx RDC ServicesHeadquarters

Suppliers

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

Repair Center

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

RDC Parts Management

Good Parts Dispatch

LocalCustomers

Repairable Parts Order

Defective P

arts Retu

rn

Defective Parts Return

Repaired Parts Return

New Parts Replenishment

Repair Work

SPLCustomer

Improved TAT

• 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

FedExRDC

What is FedEx CIL_

Critical Inventory Logistics

What is FedEx CIL_

Critical Inventory Logistics

� Time-Definite Delivery of Spare Parts, Consumable

Parts, & Repair-and-Return

FedEx

Facility

SPLCustomer

RepairCenter

Repaired Part Good Part

Defective Part

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

Express Parts ReplenishmentExpress Parts Replenishment

�Time-Critical Consumable Parts Delivery to

Expedite “Time-to-Machine”

International Delivery

Consumable Repair Parts

Repair Parts Order

LocalCustomers

OverseasCustomers

Repair Parts Order

2 Hours – 24 Hours

Domestic Delivery

24 Hours – 48 Hours

• Rapid Order Processing upon receipt of Repair Parts Order

• Express Parts Replenishment of Consumable Repair Parts

Rep

lenishmen

t

Rapid Order Handling at EDC

Consumable Repair Parts

• 2-4 Hour Local Deliveries on a 24 x 7 x 365 “On Call” Basis SPL

Customer

FedExRDC

FedEx APAC RDC CustomersFedEx APAC RDC Customers

FedEx Insight (IP tracking)FedEx Insight (IP tracking)FedEx Insight (IP tracking)FedEx Insight (IP tracking)

Integrated Information Technology

Thanks for listening.