This article explains that global companies often rely on several logistics providers to ensure they run smoothly. Recently there has been a trend to move beyond third party logistics (3PL) to fourth party logistics (4PL) suppliers, which can act as a single provider managing several third parties on behalf of the client.
“You can sometimes find that companies have grown quickly yet not had logistics represented at a senior level,” comments Tim Lawrence, Supply Chain Specialist at PA Consulting Group. “Then you can often find that companies have grown through mergers and acquisitions with very complex set of third party arrangements in different regions. They can often find they have multiple legacy hubs dotted around the globe so they have too much capacity in one region and not enough in another.
Tim Lawrence continues: “This is where they often need help with strategy. One client of PA’s found themselves with ten warehouses and distribution hubs in Benelux alone which obviously wasn’t very efficient and with high energy prices the cost of logistics is going up, so companies often need a strategic helping hand.”