FOURTH PARTY LOGISTICS

WE PROVIDE FOURTH PARTY LOGISTICS (4PL) SERVICES TO OUR CLIENTS.

Fourth Party Logistics (4PL) is known by other names such as Managed Logistics Solution, Co-sourcing.
Regardless of the name that is used the key criteria of this outsourcing business model is that a 4PL
provider is a supply chain integrator that assembles andmanages the resources, capabilities and
technology of its own organisation with those of complementary service providers to deliver a
comprehensive supply chain solution.
4PL FEASIBILITY MODEL

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1. Project Identification:
Activities
Internal assessment: what is the potential for cost savings / efficiency gains?
Assess the current resource proficiency and capability
Outcomes:
Decision on engagement of external partner
2. Opportunity Assessment:
Activities
Detailed data gathering
Benchmark cost and service levels
Network Review - locations, DC's, Customer Locations, Other Divisions etc.
Operational Review - processes, IT, MHU's etc.
Outcomes:
Detailed assessment of savings potential- opportunity from consolidation
Assessment of benchmark against best practice
Network Model - Scenario Analysis
Detailed Business Case to implement Managed Logistics Services
3. Design Commercial and Operating Models:
Activities
Establish optimal commercial model:
Who has the contractual relationship with service providers?
Who has ultimate responsibility for the freight?
Logistics Operating model:
Governance and decision making
Organisational structure
Account Management
People capability

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Business processes
Information technology
Business planning
Outcomes:
Business Case
Project Charter
Implementation Plan
4. Pilot Program:
Activities
Decide on Pilot region/product group
Agree on pilot goals and performance assessment process
Establish pilot team and resource plan
Implement pilot program
Stakeholder meetings for duration of pilot
Outcomes
Confirmation of benefits estimates in business case
Fine-tune the commercial and logistics operating models
Adjust Implementation Plan
5. Full Implementation:
Activities
Establish implementation team
Develop operating plan including daily processes and procedures
Develop KPI reports/dashboard and compliance program
Implement IT solution
Establish communications plan
Develop continuous improvement programs
Establish invoicing mechanisms
Outcomes
100 day implementation plan
Progressive reports
Complete logistics operating plan

NEXT DOCUMENT
3PL VS 4PL
Third Party Logistics (3PL) And Fourth Party Logistics (4PL)
What is a 3PL?
A third party logistics company is one that works with shippers in order to manage another companys
logistics operations department. 3PL is the action of outsourcing activities that are related to logistics and
distribution.
What is a 4PL?
The concept of a 4PL provider is an integrator that accumulates resources, capabilities and technologies
to run complete supply chain solutions.
Main Difference between 3PLs and 4PLs
The 3PL targets a single function, whereas the 4PL manages the entire process. A 4PL may manage the
3PL.
3PL
Third party logistics providers usually specialise in

Integrating operations

Warehousing

Transportation services

Cross-docking

Inventory management

Packaging

Freight forwarding
These services are scaled and customised to the customers specific needs based on their market
conditions and the different demands and delivery service requirements for their products or materials.
There are thousands of 3PLs in the market that offer different models and perform different tasks. For
example, certain 3PLs may only specialise in certain industries.
The 3PL have a large footprint throughout the country. This makes it viable for companies to service
clients in remote regions at a much lower cost than doing it themselves.

Types of 3PL Providers

1.

Standard

Basic activities: Pick and pack, warehousing and distribution.

2.

Service Developer

Value-added services such as tracking and tracing, cross-docking and specific packaging
3.

Customer Adapter

This comes in at the request of a customer. It is when the 3PL takes over complete logistics of the firm.
4.

Customer Developer

This is the highest level of 3PL. This is when the 3PL integrates itself with the company, and ends up
taking over the entire logistics operation.
4PL:
Functions provided by a 4PL company

Procurement

Storage

Distribution

Processes
A 4PL company takes over the logistics section of a business. This could be the entire process, or a side
business thats imperative to have as part of the main business.
An example here would be a bicycle importer. The main function is to import bicycles however, they need
to have spare parts for these unique bikes. A 4PL would manage the total logistic operations for the spare
parts business.
The concept of a Fourth-Party Logistics (4PL) provider was first defined by Andersen Consulting (Now Accenture) as an integrator that assembles the resources, capabilities,
and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions. Whereas a third party logistics (3PL) service
provider targets a function, a 4PL targets management of the entire process. Some have described a 4PL as a general contractor who manages other 3PLs, truckers,
forwarders, custom house agents, and others, essentially taking responsibility of a complete process for the customer. A Fourth-party logistics provider can also be considered a
consulting firm specialized in logistics, transportation, and supply chain management.