Fourth Party Logistics
Fourth Party Logistics Provider (abbreviation: 4PL provider , in German fourth party logistics service provider ) are service providers who coordinate the logistical processes of a company without bringing in their own material assets for the processing .
Concept of the 4PL provider
In the Fourth Party Logistics describes logistics the concept of a logistics provider that does not own real assets (ie no own vehicles, warehouses or other logistical equipment) owns or is hereby in forwarding sense, but the coordination and summary of service offers various logistics service takes over. The specific task of a 4PL provider is therefore to take over the control and integration function within the supply chain without its own resources and to increase the efficiency of the supply chain. In this respect, a 4PL provider acts in the function of a neutral mediator between the client and the various service providers who tries (for the benefit of the client) to optimize the various service offers in an overall package.
Since this coordination must be carried out continuously with the aim of further optimization, 4PL providers must have a well-developed IT structure. This is the only way to integrate different services. Furthermore, a solid industry and practical knowledge is necessary, as the respective business specifics must be taken into account. A 4PL has no hardware. He is at your side with an advisory role.
development
The proportion of outsourced services in logistics has grown continuously. As a result, the large logistics service providers, who offer both classic transport, handling and storage services (TUL) as well as value-added services, have grown into an established third party between customer and supplier. These third-party logistics providers (3PL) sometimes operate and control the entire logistics chain of their customers, often with largely their own assets, such as vehicles and warehouses.
In the course of extensive outsourcing ideas and in the endeavor to achieve rapid cost reductions, the outsourcing of planning and optimization functions in companies is currently increasingly discussed. This discussion ties in with the 4PL idea: A fourth independent party takes over the optimization, integration and control of the logistics chain on behalf of the customer and thus also the selection and commissioning of the 3PL service providers. As a kind of general contractor, the 4PL puts together performance components of the logistics chain that are cost-effective and service-optimized.
Advantages for the customer
In addition to the classic 3PL service, the 4PL draws on best-in-class solutions that are tailored to customer needs, regardless of its own resources. The customer gets by without compromise solutions and restrictions due to rigid service provider structures. Transporters, forwarding agents and contract logisticians usually have their own resources (vehicle fleet, storage space, etc.), the utilization of which is a logical goal. 4PL service providers are free from such constraints and, depending on the requirements, select the most suitable measures in order to put together a package for the customer. Working as a service provider for many customers enables a broader overview of the markets and a very good level of purchasing logistics services.
Practical examples
In practice, the 4PL has rarely prevailed as an external service provider, as potential clients see its tasks as an activity that jeopardizes their core competencies and thus see themselves threatened by unwanted disclosure of in-house knowledge.
There are currently three groups of offers on the market that correspond to the 4PL concept: A 4PL should offer holistic, integrated supply chain process management from which the customer can select the desired scope of services in a modular manner.
3PL service provider with a 4PL offer (Lead Logistics Provider)
3PL providers have good basic requirements for offering 4PL services and appear on the market as lead logistics providers (LLP). Often, however, customers have doubts about neutrality, since the main business is achieved through the use of their own assets. This often confronts the LLP with a difficult task: it has to prove that its service is the most cost-effective and efficient operation.
Internal 4PL service providers with no assets / resources
In contrast to an LLP, the internal 4PL provider, as it has developed in the retail and consumer goods industry in recent years, has the necessary neutrality. The decision between internal provision and outsourcing is based on the consideration of whether this is a core competence for the company and whether the effort for an internal 4PL solution can be justified. One example is the “internal 4PL” MGL of Metro AG , whose concept of procurement logistics was awarded the German Logistics Prize in 2002.
External 4PL service providers without assets / resources
The core competence of the 4PL service provider without its own assets lies in the integration, planning and control of the customer's logistics processes. The young market is still very fragmented. However, once the hurdle of a difficult selection process has been overcome, the degree of coverage with the requirements is often the highest compared to the two alternatives.
See also
Individual evidence
- ↑ Kai Althoff, Julian Schulcz: Fourth Party Logistics (4PL) - avoidance of conflicts of objectives by independent providers ( Memento of 6 July 2014 Internet Archive ). 4flow newsletter, July 2009. Online at 4flow.de, accessed on August 1, 2013.
- ↑ New concepts need trust . In: Deutsche Verkehrszeitung (DVZ), October 20, 2009.