Fourth Party Logistics (4PL)

    Hello everyone, This is Sathya M from Amrita School of Business pursuing my second year MBA in Operations.

                Fourth party logistics (4PL) refers to the outsourcing of a single partner who oversees all the logistics and supply chain operations. They will be the ones to design, build, and maintain the solutions for the integrated supply chain. The difference between 3PL and 4PL is that 3PL oversees your logistics whereas 4PL oversees the complete supply chain.

                3PL will be responsible for the movement of goods and will do all these works in your name. But 4PL will even take care of the paperwork and responsible for managerial decisions thereby. It is like giving complete control over to them to make sure your supply chain works as needed. Simply it handing over the entire supply chain.3PL works well with small to medium businesses while 4PL is suited for medium to large businesses.

 

The key reason for companies to go for 4PL are:

• When the end-to-end supply chain visibility lacks.
• Leverage of resource
• To have access to powerful technology
• Chances to work with supply chain experts

Advantages:

Trusted Advocacy:

By constantly working to enhance the supply chain processes of their clients, 4PL providers take logistics services to the next level. There is a long-term commitment between 4PL suppliers and their clients, and it goes beyond transaction requirements.

With all the advantages of outsourcing, 4PL's provides the convenience and security of an in-house logistics department. It is one of the advantages of a 4PL service to have a partner who can vouch and advocate for the bottom line of your business without the expensive investment of equipment and assets needed for efficient logistics.

 

Customer connectivity:

                The way customers and the retailer can communicate is continuously evolving in the supply chain. Customers are not ready to sit back and talk face to face with the retailer. They are more interested in the online mode of communication. Being in contact with Customer and engaging with them is the key priority to 4pl and they will act as a single point of contact.