The face of supply chain management has undergone a dramatic transformation in recent years. What was once an internal company process is now an increasingly outsourced function with the potential for a significant return on investment. Inbound Logistics’ 2018 22nd Annual Third-Party Logistics Study confirms this trend’s shifting into high gear. Sixty-one percent of shippers increased their use of outsourced logistics services in 2018 compared to fifty-eight percent reported in 2017.
In the fast-paced business environment of today, not having a reliable logistics strategy can make or break your bottom line. Even with the best product in the marketplace, if you can’t get it packaged properly and into customers’ hands quickly, it could spell disaster for your brand.
The good news? There are more options than ever for your business to choose from when it comes to supply chain management. Every business can benefit from a streamlined logistics process and selecting the right company to trust with creating your unique supply chain strategy is a crucial decision.
Ready to take a look at some of the different types of supply chain strategies and break down their benefits? Let’s roll.
THIRD-PARTY LOGISTICS
Also known as 3PL, the Council of Supply Chain Management Professionals defines this as the outsourcing of all or part of a logistics operation to a specialized company and refers to a third-party logistics provider as a firm that provides multiple, often integrated, logistics services.
A third-party logistics company partners with your business and executes all of the contracted services with its resources. For example, your third-party logistics provider might prepare your product for transport by packing, supply warehouse or trailer storage, or transport goods to their destination. Third-party logistics companies can focus on one or all of these areas of supply chain management.
KEY BENEFITS
A seasoned third-party logistics company brings professionalism and expertise to the table, resulting in a wealth of advantages for your company’s procurement process.
- Specialization enables superior performance.
- The economy of scale saves money.
- Effective coordination and collaboration save time.
FOURTH-PARTY LOGISTICS
The Association For Supply Chain Management defines 4PL as the outsourcing of all of a clients’ supply chain to a separate company that then acts as an interface between the client and multiple logistics providers.
A fourth-party logistics company is a one-stop-shop for all of a clients’ logistics needs, selecting and coordinating with the best service providers as needed, i.e., other outside companies.
KEY BENEFITS
- Fourth-party logistics companies are ready and able to step in and take complete control of every aspect of your supply chain.
- Neutrality in choosing suppliers allows for a superior combination of value and service.
- With a bird’s-eye view of your whole supply chain, it’s easy to identify additional areas of opportunity.
- Broad strategic vision results in increased efficiency.
KEY RESULTS FOR BOTH
Though 3PL and 4PL service providers differ slightly in process, utilizing either of these services can benefit your business in a big way.
- Internal resources are freed up, returning focus to core aspects of business.
- Ultimately, customers receive improved quality service.
THE BOTTOM LINE
Supply chain management can get complicated, fast – fulfillment, storage, and shipping have their challenges. An experienced 3PL or 4PL organization can collaborate with you to quickly create, tailor, and streamline the best supply chain strategy to fit your company’s unique needs.
Located in Vineland, NJ, Gorgo Group is a trusted regional resource for supply chain management, serving businesses large and small. Get your company on the fast track to success with an expert supply chain management strategy from Gorgo Group today.