Delivering the Goods and More
The case for third-party logistics (3PL) firms elevating to 4PL status
The recent economic downturn has turned traditional supply chain models upside-down. This impact is likely to continue while the economy revs up again and companies revisit their supply chain strategies. While customers of logistics services reevaluate their approach to manufacturing and distribution, logistics providers – particularly 3PLs – have the opportunity, and perhaps even face the imperative, to offer more encompassing and specialized services. Deloitte believes the most successful 3PLs in coming years will be those that make the successful and fastest leap to 4PL capabilities.
Increasingly, specialization is the catchword. You could be a great 3PL warehouse operator or traffic manager, yet unless you have specific domain knowledge in a particular functional area or industry vertical, you could miss out on potentially lucrative opportunities. For example, a medical device manufacturer might want an outsourcer that intimately understands its business down to pending regulations that could impact it years down the road. A high-tech manufacturer needs a logistics firm with extensive return-and- refurbish experience. Generalists are quickly going out of favor.
Sound daunting? It can be. But we believe there’s good news here, too. The extreme nature of the recent economic downturn changed the cost equation for manufacturers. Those that have survived are squeezing every penny from operations. More are outsourcing functions that aren’t core competencies. So rather than trying to sustain or develop logistics capabilities themselves, they’re finding it easier and more cost-effective to hand over their transportation, distribution and management to third parties that have the expertise, technical competence and experience to do it all.
So there’s opportunity here. But can you deliver the goods? To learn more, read the below paper, Delivering the Goods and More.