Why outsourcing to a 4PL adds value

Posted by Barloworld Logisitics on 02 Jun 2017 9:00:00 AM

Why outsourcing to a 4PL adds value

Expertise, single control and value creation in your supply chain. There are many benefits to outsourcing your end-to-end supply chain management to a fourth-party logistics provider (4PL).

Among South African business leaders, outsourcing is still something of a dirty word. For many, it denotes weakness and an inability to properly grow and manage all the traditional aspects of a successful company. Yet this is an outdated view – and one that does not take into account today’s complex business and operating environment.

The benefits of outsourcing to a 4pl

Given the fast pace of change, ongoing technological development, and prevailing uncertainty, savvy businesses are focusing on their core activities. They understand the importance of holding strategic functions close, and then looking to external partners to fulfill those roles where specialisation is not needed. So, for example, if you specialise in telecommunications you can focus on being the telecommunications expert while your 4PL partner focuses on what they do best: supply chain management.

Download our telecommunications case study to see how Barloworld Logistics helped a leading telecommunications service provider to maintain service levels above 98% with a smart supply chain solution.


What is 4PL?

Fourth-party logistics (4PL) is the term used to describe a supply chain management company that acts as an integrator of resources, capabilities and technologies across all disciplines to ensure the smooth operation of your end-to-end supply chain. The coordination of logistical activities can be the most complex aspect to a supply chain, and a 4PL becomes the accountable party for the functioning of the whole.

What is a 3PL, how is it different to a 4PL, and which one is right for your business? We're unpacking the often confused (and even debated) “PL” terminology.

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Where does a 4PL fit into your supply chain?

Through the single, specialised solution offered by a 4PL provider, leaders are not required to interact with, nor directly manage, a large number of providers. When viewed individually, there is a limit to the value that can be extracted from a single logistical activity however, when these activities are coordinated under a single banner, value can be amplified. For example, there is a cost-saving limit within the transportation of stock from point A to Point B however, when transport is coordinated closely with other activities, supply chain value can be unlocked through inventory planning, back haul opportunities and the import process.

At Barloworld Logistics, the ability to partner with and coordinate a vast number of suppliers towards a client’s common goal is the very basis of a smart supply chain solution. The whole is truly greater than the sum of the parts when it comes to supply chain management.

What are the benefits of using a 4PL?

By considering people, process and technology, Barloworld Logistics engages the entire supply chain with the aim of enabling business objectives. The traditional benefits of engaging a 4PL remain valid. Access to a broader supplier base, standardisation of process, reduced costs and single point of accountability are all realistic expectations from a 4PL provider, but the unquantifiable benefit comes from engaging with specialists who are as passionate about your business as you are.

Read more about the services we offer

Today, a true 4PL relationship is about partnering and sharing information around the critical facets of a business and its moving parts, creating a common understanding of success and connecting companies’ products to customers in dynamic, efficient ways to create sustainable businesses for the future.

If you're looking for a smart supply chain solution, contact Barloworld Logistics by clicking the button below.

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Topics: Services