Supply chains no longer act as linear paths; they have evolved into complex networks. Logistics leaders are under significant pressure to accommodate the burgeoning needs of their organizations: more complex services, greater levels of optimization, enhanced resiliency and the agility needed to change direction. Technology is lowering barriers and offering new opportunities for 4PLs to optimize supply chains.
Fourth-party logistics (4PL) service providers act as an extension of your organization, offering outsourced management of the logistics function within your supply chain. The partnership goes beyond just execution of operations since logistics functions can range from transport management to warehouse operations.
4PLs act as close business partners that manage your supply chain, allowing you to focus on your business strengths, sales strategy, market expansion or any other urgent needs. There are numerous benefits to this relationship:
- Standardization of processes
- Increased visibility of your supply chain through digitization
- A centralized approach focused on continuous optimization of cost and processes
Additionally, 4PLs do not have invested assets which influence decision making. They function in a neutral position specifically to augment your business capabilities. The business partnership is characterized as a mutually beneficial relationship, often through gainsharing agreements.
Industry Expertise
Over time, 4PLs become an integral part of your supply chain organization and acquire a thorough understanding of your business. A 4PL team is multidisciplinary and possesses unique experience in a variety of industries, including healthcare, athletics, energy, fashion and numerous others. They retain knowledge on relevant industry trends and work to implement them through innovative solutions.
4PL service providers support you with an experienced team of experts who manage your logistics and provide relief to your organization so it can allocate resources elsewhere to build capacity. 4PLs also maintain access to a network of global and regional service providers, allowing them to support organizations in sourcing vendors for their unique business needs.
Labor shortages were already an issue before COVID-19, and access to supply chain talent has continued to be a pressing concern. Unemployment across the US and EU has decreased since 2019, with U.S. unemployment sitting at 3.90% as of December 2021. Requirements to become a succesful supply chain professional are also rapidly changing, which can exacerbate this talent crunch. Professionals will need increasingly diverse skillsets as disparate supply chains undergo digitization. 4PL service providers will bring this expertise to your organization.
Your Supply Chain Digitization Journey
Technology plays a critical role within the supply chain: it increases visibility and transparency while also improving efficiency. Selecting the right technology investments can be expensive and time consuming, which is why companies are focusing on their strengths and choosing to outsource certain functions through a business partnership with a 4PL service provider. According to Gartner, supply chain management outsourcing will be an ongoing trend.
OIA Global 4PL maintains an array of customized technology solutions ready to meet your unique business processes. OIA Connect, our cloud-based proprietary technology, functions as a overlapping platform that enables organizations to integrate multiple data sources into a single platform. This significantly increases the sum value that could be derived from these applications. For example OIA Connect allows customers to receive detailed reports that derive information from different applications and provide valuable insights into the performance of their logistic networks.
The 4PL strategy begins by understanding your unique supply chain challenges and then identifying areas of improvement and developing customized solutions.
Author
Joris Nijman
