Why the Rise of the 4PL is Good News for Your Business

Supply and Demand Chain Executive — On-demand delivery, trade uncertainties, siloed information. For today’s supply chain managers, the list of concerns is long.

Current industry and geopolitical trends are complicating matters further. Companies are juggling more products and suppliers, leaving supply chains increasingly vulnerable to disruption. In the grocery industry alone, the average number of SKUs skyrocketed from 9,000 in the 1970s to 39,500 in 2015. Amazon has made two-day delivery the new normal, with retailers racing to build fulfillment operations that can meet customer service demands. Meanwhile, potential tariff increases on exports from China and other foreign entities have global businesses worried about the impact to their supply chain operations.

To keep up in this evolving environment, many businesses seek outside expertise. But while outsourcing shipping, packing and other functions to 3PLs is nothing new some and that model doesn’t go far enough. Unifying internal and outsourced teams remains a challenge, making it diffcult to gain a complete picture of the supply chain. Businesses also are collecting vast amounts of supply chain data throughout the organization, but don’t have the infrastructure or expertise to mine it for insights.

Enter the 4PL. Also known as supply-chain-as-a-service (SCaaS), 4PLs act as a true extension of the business by assuming responsibility for all supply chain-related activities. By combining technology, processes, transportation and more under one roof, a 4PL can help drive new levels of visibility and productivity as businesses face increasing supply chain pressures.

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