The practice of the global logistics services market shows that more and more logistics companies, which still operated based on the 3PL model in the 1990s, are now considering their operations in the 4PL category. Examples include Kuehne&Nagel Lead Logistics, Hoyer, Schneider Logistics, Exel, UPS Logistics, and Ryder Logistics. This means that 4PL-type organizations are slowly becoming an inherent link in modern supply chains. The purpose of this article is to show the role that 4PL plays in supply chain management and its impact on the efficiency of logistics processes.
Towards Intelligent Supply Chains
Supply chains are dynamic structures subject to continuous evolution driven by the volatility of conditions and the goals of their effective functioning. While in the late 1980s companies were mainly focused on achieving excellence in fragmented areas of logistics (cf. Fig. 1), at the beginning of the 1990s, the priority became the excellence of logistics processes, i.e., a process approach. In the mid-1990s, integration processes in the supply chain became strongly marked, and at the end, attention was focused on improving the processes of managing it. The turn of the century brought a new stage in the evolution of supply chains, namely the e-Supply Chain, which was a consequence of the escalation of the field and intensity of the Internet’s impact on logistics processes and structures.
The main factors determining the directions and dynamics of changes in modern supply chains are undoubtedly globalization, the development of the electronic economy, partnership and integration processes, and the increasing and diversifying needs of customers. It is predicted that the influence of these factors will lead to the structuring of Intelligent Supply Chains (iSC – iSupplyChain), based on the full synchronization of the activities of all cooperating links.
Efficient management of supply chain assets is slowly becoming insufficient to gain a lasting competitive advantage. The concept of iSC functioning states that one should take into account a complex of sources of competitive advantage, interacting in a synergistic relationship, which are to be:
– knowledge and information
– speed and the ability to manage time
– flexibility
– ability to cooperate
– E&HT (electronic and high technology).
The essence of iSC functioning therefore boils down to taking dominance and exercising control over the decision-making process relating to the entire supply chain. According to Accenture, this role is to be assumed by the so-called Kingmaker.
Basically, a Kingmaker is an enterprise (organization) whose goal is to create added value in the supply chain by building a set of the best competencies and combining the resources of individual links, and consequently – by building effective alliances aimed at continuous improvement of customer service and reduction of logistics process costs. Connecting supply chain links into such alliances is to take place on the principle of “the best team with the best”. The Kingmaker is therefore to be responsible for synchronizing logistics processes occurring along the entire supply chain, on planes between all partners.
The article comes from the magazine “Logistyka” 4/2004.