Annexure V

3PL Service Operating Model

End to End Service

04 April 2021
 Table of Contents

1. Introduction
CONTENT

2. Current Local Supply Model

3. 3PL Service Operation model
4. 3PL Process Flowchart
5. 3PL Service Value Add

2
 Introduction
Ground rule in Logistics : less “number of handling times, more efficient & Safe is your Logistics”

3PL External Warehouse for industrial companies has a specific parameters to make it operational and Cost Efficient
Except for Raw Bulk Material, EGA Receive its inbound materials in three forms:
1. Full Container Load (FCL) – Imported
2. Full Truck Load (FTL) – Local Supply or Container Destuffed in CFS and loaded on a Truck
3. Less Truck Load (LTL) & Small Vehicles – Local Supply

Using 3PL external warehouse to handle the above mentioned 1st and 2nd forms will result in adding unnecessarily costs to existing Operational Cost, without adding any
value to the full logistics operation, unless EGA Warehouse is facing area shortage. In this case, we recommend to go for optimization process of the storage capacity within
the same facility. We are confident to solve this problem (approx. 25% storage space can be optimized ) if it is there, as this is one of our core competencies

Nevertheless, in the 3rd form of receiving, we recommend to use 3PL external warehouse to consolidate material which brings the advantage of reducing traffic, security risk,
entry permits and less delivery lead time. However, this model will only be cost effective, if the shipment terms changed to “EXW” (procurement cost is reduced) where all
material supply will be collected from Vendors based on Milk-Run Model. This will bring in a real operational and cost efficiency of 3PL Operation.

Though we don’t recommend a 3PL External Warehouse in this RFP scope but Emirates Logistics has the capability & capacity to provide a suitable facility for 3PL External
Warehouse upon EGA request.

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 Introduction

• Transportation cost resembles 30% to 50% of the

Logistics Cost

• What Suppliers do to deliver material to EGA every

month “estimated”:
o Making min 4000 Trips
o Vehicles running 300,000 Km
o Spending 30,000 liters of fuel

• More vehicle access to plant, higher safety risks,

pollution, high traffic, waste of resources, late
delivery & high operation cost

• 3PL: Collect → Consolidate → Deliver

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 Current Local Supply Model

• High No. of small Bottlenecks:

trucks from
multiple suppliers
received daily 1. Late delivery by individual suppliers to
• Different vehicle consolidate cargo size
sizes and shapes 2. Higher delivery cost that impact price
• Received in • Offloading different
types of packaging 3. Higher stock levels
different timing
4. More PO delivery expediting
5. No system control on delivery
6. Inefficient COB contract
7. Interrupted / fragmented receiving
8. More trucks inside plant
9. Higher safety risks
10.More work load for security and
Warehouse

• Move to Receiving Area

• Put Away
• Receiving & Inspection

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 3PL Service Operation Model

Start PO data Milk Run Collection Planning

Integrate & Compile
Auto Data Transfer: PO Data • PO Collection Planning
Local PO Details • Vendor communication &
Items Details Time schedule setup
Vendor Details
Delivery Terms • Material readiness Date &
Time
• EGA – EL communication protocol • Truck route management
End
• Vendor communication protocol • Route optimization
• Shipment booking
Dynamic Updates • Change Management
Dates, Status & Reason
• ETC / ATC

Material Consolidation & Delivery Planning

PO Management
• Material Re- Packaging / Repackaging
System
• Material Tracking & Identification
• Dispatch & Delivery Mgt.
• Communication & Time schedule Material to Cross-dock Warehouse
• FIFO
• Consolidation plans
• Vehicle selection
Material Delivery
• Shipment booking
EGA Warehouse
Documents • Change Management
• ETD / ATD

POD

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 3PL Process Flowchart
Start

Data Integration: Material Draft collection Planner review & assign

Local PO Details Readiness System plan from Vendors: Collection Grp & Vehicle
Items Details with Vendors DD / MRD, Wt., Reupload to WMS
Vendor Details Vol., Zone
Delivery Terms

Direct Planner to assign WMS create

Collector Groups:
Delivery Collection Orders to Collection Orders
Packages Receiving
(Y/N) Collector Groups DD / MRD
& Visual Inspection

Yes
Milk Run

Packages
Planner review Draft Delivery Storage and Put Box-ID Material
Receiving,
Reupload to Plan Away: tagging, Receiving in
Pick Order Release Visual
WMS FIFO, Wt., Vol., Material to be tracked Re-Packing / CDWH
Inspection, Wt.
Initiate Delivery Vehicle Package-Wise Consolidation Vol Verification
optimization

Delivery Notes Creation &

Vehicle Booking Order Packaging & Delivery to Offloading in CWH or
Set of Document GRN
Request Picking Loading EGA Plant Location
Attachment

POD Delivery
End update
Legend: Notes:
CDWH: Cross Dock Warehouse Red border process, means transaction to be performed through Barcode Tracking System using Handheld Devices.
For Direct Delivery: GRN to be made at CDWH without inventory the material then Delivery 7
 3PL Service Value Add

✓ Reduce risks of damage, safety and security

✓ Cost saving

✓ Faster material delivery

✓ Less truck traffic inside plant

✓ Consolidated full truck load delivery

✓ Eliminate PO delivery expediting

✓ Efficient COB Contracts

✓ Reduce stock level

✓ System controlled delivery

✓ Focus on core procurement business

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