World Trade - January 2009 - (Page 23)

chain utilization internally by finding and recruiting logistics experts in what several have said is a supplystarved ﬁeld, create a vision and buy the tools and systems to drive value, or to outsource?” Fowler asks. In most cases it’s the latter. “4PLs bring the traditional beneﬁt of outsourcing,” Georgia Tech’s Langley says. Those include management and logistics expertise, return on investment, economies of scale and the ability to adapt rapidly to change in the supply chain. Those attributes were at the heart of a U.S. Department of Defense (DOD) move a few years ago to hire a 4PL to manage some $6 billion in DOD business. When some small and medium companies ﬁled a lawsuit to block the move, Langley was retained by the government as a supply chain expert. The smaller firms’ fear was that a large company would take a signiﬁcant amount of their business, he says, but “the government found the advantages of working with a 4PL too great to miss.” Beneﬁts accrue to the 3PLs that work with 4PLs too, Langley points out. “Working with a large company can help smalland medium-sized companies increase their volume of business,” by exposing it to additional clients and other divisions, says Mach 1 Global Services’ Bond. The partnerships that are formed through 4PL collaboration mean that “we get the opportunity to do what we do well,” Bond explains. “A 4PL would have multiple partnerships, so I don’t have to be an all-in-one solution. No company is great everywhere!” he stresses. It’s not enough to hire a 4PL and wait for stellar results. Instead, Kushmaul says, “It’s important to set up the 4PL for success.” Among other things, that means ensuring that the 3PL knows it’s a requirement to work with the designated 4PL. “Going around the 4PL to me isn’t an option,” he emphasizes. There are also a few downsides, Kushmaul points out. “As you outsource, a bit of control is lost. Therefore, it’s important to work closely with the 4PL to ensure you have the right level of detail and the right ﬁt. The cultural ﬁt is extremely important, too,” he adds. “The executive level sees and understands the beneﬁt of a 4PL, but it’s not necessarily clear at the grassroots. There’s certain nervousness about the direction that has to be addressed,” Kushmaul says. “We didn’t change the people, he emphasizes, but we changed their work to ensure that Diebold requirements were well-met.” “Only a fraction of supply chain managers have the understanding and commitment to use 4PLs,” Langley says. “There’s still a signiﬁcant knowledge gap on the part of customers about the value a 4PL can provide.” 4PLs are at about the same place 3PLs were 15 years ago. “The market is still trying to determine how to use them,” Langley says. WT Contributing Editor Gail Dutton regularly reports on supply chain logistics. For reprints of this article, please contact Cindy Williams at williamsc@bnpmedia.com or 610-436-4220 ext. 8516. WWW.WORLDTRADEMAG.COM 23 WTM09084Mult.indd 1 8/12/08 11:14:41 AM http://www.multisorb.com http://www.multisorb.com http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - January 2009

World Trade - January 2009 Contents Supply Chain Finance Conference: The Right Stuff at the Right Time! Is the Dollar's 'Exorbitant Privelege' as the Global Standard at Risk? Supply Chain Watch Tradewinds The Rise of the 4PL An Evolving Tech Backbone Makes 4PL Service More Effective The Changing Landscape of U.S. Railroads Intermodal Grows Up Port of Hamburg Grows as Distribution Point to Eastern Europe Outsourcing Without Fear Measuring the Carbon Footprint

World Trade - January 2009

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