It is a known and proven fact that Fourth-Party Logistics (4PL) and outsourcing of nearly every conceivable logistics function is a very effective strategy which provides immediate financial and operational performance efficiencies that assist companies to reduce costs and improve supply chain performance. If your company is still debating whether or not to partner with a 4PL, then read this article because Millennium Logistics Management provides 3 reasons why you should consider using a 4PL!
Some organizations are fortunate enough to have their industry depth and expertise, human capital, and IT infrastructure to manage their transportation from within, however, the majority does not have that opportunity. This is mainly because they lack the significant technical infrastructure to do so effectively or efficiently or it is commonly not viewed as core competency. For this reason, they choose to outsource this part of the business to a 4th party that specializes in these areas.
It is no surprise that more and more corporations understand the exceptional impact logistics and transportation can have on their overall business performance and are choosing to take meaningful strides to optimize their supply chain operations. Companies should consider outsourcing their transportation management for the following three reasons:
1) Commitment to Continuous Improvement: A 4PL is constantly striving to enhance their ability to drive innovation and deliver long-term value for their customers. And we’re not referring to one-time spike in performance but rather, a continuous improvement that comes as part of their service, solutions and expertise because transportation optimization is more than just moving freight for the lowest cost.
2) Comprehensive Technology Platform: A 4PL has access to a comprehensive technology platform; their technical expertise is centered around the solutions they use to run their clients’ business and become their core technology platform. The core technology systems that run companies focus mostly on the operating and financial aspects of the business, not the transportation and logistics functions. Therefore, instead of buying a system and hoping for the best, the best approach is to outsource to a fourth-party logistics with it’s own proprietary technology that is constantly focused on it and the implications of that platform on their client’s business.
3) Access To A Team of Experienced and Highly Knowledgeable Supply Chain Professionals: One of the greatest advantages of using a 4PL is that they are made up of experienced and capable logistics professionals (from entry level employees to the CEO). When a company outsources a 4PL, they immediately gain an entire team of supply chain professionals with various areas of competence, knowledge and expertise in and around this industry’s mode, regulations, segments, geography and more.
The reasons to use a 4PL are many and the benefits of doing so are even greater. Millennium Logistics Management can look at single aspects of your supply chain or the entire supplier network and help you manage the new processes, or we can manage it for you. We analyze existing processes, from initiation of an order through fulfillment, and evaluate modal selection, carrier utilization, and existing cost structures. We formulate a customized solution for your unique needs. Contact us today to learn how we can improve your supply chain system!
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