Logistics services in North America, and around the globe, have undergone vast changes the past three decades. Supply chain management prowess was once demonstrated by fleets of high-speed trucks emblazoned with company brand logos, but in recent years, the practice has slowly been replaced by outside logistics providers championing multiple parties.
Previously, corporations commonly poured considerable resources into owning, operating, and maintaining in-house logistics systems to move their materials and goods from point A to point B. However, after evaluating the data from those early methods, companies have learned they were wasteful and inefficient. This began an industry-wide shift away from owning an all-inclusive operations and logistics experience.
The benefits of shifting those resources from asset operation and maintenance costs to an outside 4PL logistics provider are undeniable and companies are sitting up to take notice.
As logistics practices evolve away from in-house operations, this creates a demand for qualified, independent logistics companies. These outside providers now offer modern and innovative options to meet their client’s growing needs. The new frontier of supply chain management is a high-tech world of IoT options, sophisticated strategies, and customer-centric ideals.
Systems called 3PL and 4PL are leading the way in logistics firms. This is because they are providing companies with more than just efficient shipping, tracking, and supply chain solutions. They’re also providing value-added services that impact a company’s operational efficiency while revealing valuable insights for all divisions of the company. The five most common advantages companies discover with 4PL logistics utilization are:
1. Trusted Advocacy
4PL providers take logistics services to the next level by continually striving to improve their client’s supply chain procedures. Commitment between 4PL providers and their client is long-term, and it goes beyond transaction provisions.
4PL keep their client’s interests at the forefront of their focus because the relationship between a 4PL provider and a company is a valued partnership. This synergy emerges because parties committed to achieving the same goal.
Data collection and analysis is integral to optimizing a company’s supply chain management procedures. 4PL’s collect valuable data from all parts of a company’s supply chain, including other supply chain partners. Following collection, they use that data to operate within the best interests of their client.
4PL’s offer the convenience and security of an in-house logistics department with all of the benefits of outsourcing. Having a partner that will vouch and advocate for your company’s bottom line without the costly commitment of equipment and assets required for effective logistics is just one benefit of a 4PL service.
2. Customer Connectivity
The ways that customers and retailers connect is evolving, as is the supply chain management process. Online options have created new consumer habits. Customers are spending less time face-to-face with retailers and they are relying more heavily on online interfaces for their customer service connections.
While many believe online communications are harming the customer-company dynamic, 4PL providers can improve customer relations for their B2C clients by keeping consumers in close contact with their purchases.
When 4PL’s take on a client’s logistics needs they also take on the needs of their customers. For that reason, customer engagement is a top priority for qualified 4PL providers. Keeping customers informed about their purchase, from the moment they click “BUY” to the moment it lands in their hands, is a service that exemplifies quality customer care, as well as leads to better brand loyalty from consumers.
3. Improved Core Competencies
Operational improvements designed to streamline work and eliminate inefficiency allows 4PL logistics clients to reduce their spending habits. This can leave company resources free and available for redistribution.
4PL service adoption aids companies hoping to redistribute much needed resources away from wasteful logistic practices and directly into the company’s core competency efforts. By focusing on a company’s core foundations, while allowing 4PL experts to handle the distribution of products, clients find they can keep everyone focused on their primary tasks. When logistics are directed properly, productivity can only increase.
Just like business’ know their product and clients, so too do 4PL providers. Trusting 4PL providers to oversee an area they are experts in improves company efficiency.
4. Corporate Expansion
When growth is a company’s goal, 4PL providers can make that vision a reality with little disruption to daily operations. 4PL’s have access and relationships within the supply chain industry to easily assist business’ during times of growth and expansion.
4PL’s are supply chain architects that build reliable networks to support a growing company’s logistical needs. They possess good connections to national and international partners. Developing systems for the efficient execution of the flow of goods can be seamlessly accomplished with the right 4PL provider.
5. Corporate Clarity
4PL providers act as the single contact point between their client and their client’s supply chain process. Fourth-party logistics providers oversee and manage the complexities of a company’s logistical operations.
Having a singular contact point to coordinate each logistics step throughout every link of a company’s supply chain, from material sourcing, manufacturing considerations, and last-mile solutions, provides a unique look into a company’s overall operations.
4PL providers take that picture and use its information to find points where efficiency improvements can be made. Fresh eyes with a clear vision and focus on operational excellence, like those found at 4PL firms, can create efficiency strategies that go far beyond finding a low-cost shipping service.
4PL and Supply Chain Future
E-commerce retail options has created amazing opportunities and business endeavours that are operating on a global scale. Overnight, seemingly small businesses have been able to connect with clients and gain impressive exposure in locales far from their home. Such rapidly growing expansions online are great, but they don’t always translate with the limitations created by vast physical distances.
Those solutions were left for the logistics professionals to figure out – and they have!
4PL providers are effectively increasing order fulfillment and shipping times, streamlining supply chains, and reducing unnecessary overhead costs that both companies and customers, are thrilled about. While those benefits are good on their own, it’s nice to see 4PL providing benefits beyond their intended scope.
Improved customer satisfaction, increased resources for furthering core competencies, and easy, scalable options for taking advantage of growth opportunities, are all benefits for those who use 4PL for effective supply chain management.
