FOURTH PARTY LOGISTICS

Fourth Party Logistics

Fourth Party Logistics

Introduction

The fourth party logistics (4PL) concept has come out as a significant innovation in supply chain management. The 4PL concept calls for systematically incorporating the competencies and esteem capabilities of the third party logistics (3PL) sources and the prominent consulting corporations and IT providers.

This immense strategic incorporation of such paramount concerns in the context of business greatly influence the expertise, proficiencies, business strategies, strategic planning, technology and comprehensive business reach, which are of paramount significance for the businesses all across the globe.

The globalization aspect of the business world is also highly anticipated fortifying and strengthen the global demand for 4PL because of the extensive removal of the market barriers and import tariffs. To expand businesses on the global level, businesses are in a need of a massive and huge network of logistic providers at the global level that can effectively incorporate processes and information all the way through the globe while the geographical boundaries are never a barrier in their way.

Analysis of Fourth Party Logistic (4PL) concept

Analysing the concept of fourth party logistic (4PL), we may state the concept as a supply chain incorporator or an a process that integrates, assembles and successfully manages an organization's competencies, resources, proficiencies, and technology with the corresponding service providers (logistic concerns / partners) to provide a holistic supply chain solution. The 4PLs enable corporations to manage to the complex supply chains and even aid them modify their supply chain management system efficiently and productively.

Cecilia Cabodi, a research analyst at Frost & Sullivan (A global growth consultancy which has been assisting clients' growth and development for a couple of decades.) explaining the 4PL concept states: "Due to 4PL, supply chain outsourcing has undergone a paradigm shift from a cost centre to a revenue generating opportunity". It has leveraged logistics to improve service level to customers, accelerate the speed of launching new products and stimulate market penetration."

The 4PL concept has arisen as the perfect and a premier supply chain solution, that enables the diverse range of corporations all across the globe, to have a single point of accountability in their both demand and supply chain operations. This discussed matter of fact has been a fascinating key driver to respond for, and for implementing a 4PL strategy. Corporations spreading worldwide are increasingly recognizing that the 4PL has now evolved as a gradually imperative in the prevailing globalised form of the economy, not just focused on their core activities, but also their non-core activities such as long-distanced supply chain management in order to stay fair, competitive and economic in the global market.

An additional fascinating factor for corporations to turn towards 4PL is that they are in pursuit of developing closer relationships amongst the contributors all along the supply chain network, support cost cutting initiatives, advancement of flexibility to cope with demand and supply uncertainties and suspicions and ultimately to have an affirmative impact on the bottom-line, which has always been profitability. (Frost and Sullivan, ...