Defining 3PLs and 4PLs

 

Are you trying to make a decision between 3PL and 4PL? Do you know the difference? Even experienced business professionals have a tough time differentiating the two. When it comes to 3PL vs. 4PL, it is best to understand the basic functions of each before proceeding with a contract or partnership. Once you get the basics, you will have a better idea of what will work best for you. 

The Basic Definitions

First, establish a clear delineation between the two:

• 3PL: Logistics and distribution tasks are outsourced to a company working with shippers to maintain logistical operations.
• 4PL: The provider integrates resources, technologies and abilities into a holistic supply chain system. 

While 3PLs focus on singular functions, 4PLs manage the whole supply chain process and can manage a 3PL.

Third-Party Logistics

3PLs often specialize in a task like warehousing, packaging or inventory management. There are four main types of providers: 

• Standard: Includes basic packaging, warehousing and distribution activities. 
• Service developer: Covers additional services such as cross-docking, tracking and customized packaging. 
• Customer adapter: Takes over all logistics and is requested by customer. 
• Customer developer: Integrates fully into the company, takes over logistical operations and is the highest 3PL.

Fourth-Party Logistics

Since 4PLs take a most holistic approach, what kinds of functions to they perform?

• Storage
• Processing
• Procurement
• Distribution

4PLs take over a designated section of the main business. For instance, a cookie shop needs to import truffles as a business element. A 4PL would run the importing logistics. 

In the battle of 3PL vs. 4PL, the winner will depend on the parties involved. What does your business need from a logistical entity? Once you have determined that, you can align your goals with the definitions of either. If you need a micro solution, choose a 3PL. However, if you need more expansive solutions, a 4PL might be a more suitable partner.

 

If you are reading this on any blog other than The Dependable Companies
or via my RSS Feed, it is stolen content without credit.
You can find me on Twitter via @LogisticsDan
Come and visit our blog at http://ift.tt/1y1ZSTo

from blog.godependable.com http://ift.tt/20aZL4a




Sourced by Quik DMV - CADMV fleet registration services. Renew your registration online in only 10 minutes. No DMV visits, no lines, no phone mazes, and no appointments needed. Visit Quik, Click, Pay & Print your registration from home or any local print shop.