Differences Between 3PL and 4PL
The logistics sector, whose importance has increased due to the development of technology and the trade mobilized with globalization, is offered the service of companies engaged in commercial activities with many transportation modes.
What is 3PL?
3PL, a logistics term, can be explained as a company outsourcing all or a specific part of the logistics and supply chain activities outside the scope of its core business to another company. Considering that the trade sector is becoming more and more global with each passing day, the demands and needs of customers change rapidly. Companies prefer to work with logistics companies that offer 3PL services to gain a competitive advantage, maintain their earned advantage, focus on their core business areas, and respond quickly to customer demands. With the increase in competition among companies, the need for third-party logistics services has started to increase.
Third-party logistics are the service providers. These companies provide the service with their infrastructure or offer solutions to companies by cooperating with intermediary companies. They generally offer transportation, storage, inventory management, value-added services, and information systems services. In short, focusing on the operational part of the supply chain and providing services for the coordinated operation of the process is its main field of activity.
3PL service is generally used to deliver medical devices, field services, and retail.
What are the advantages of 3PL?
Speed, reliability, professionalism, flexibility, and strategic management are among the advantages of 3PL. Every stage of sorting, packaging, handling, and delivering the products to the necessary places is carefully organized during the logistics activities. Third-party logistics services are carried out step by step with a professional work team for security. The 3PL service process includes keeping the data of these products in an electronic environment and the transportation and storage of the products. It is also possible to keep track of all services performed instantly by keeping a record.
What is 4PL?
4PL, the entire complex logistics process from the production stage to the delivery of the products to the consumer, is managed from a single source. Companies offering 4PL services provide comprehensive supply chain management services. This extensive management process is the most advanced system of outsourcing logistics to date. In addition, management activities such as redesigning the logistics process, transforming the process, and putting the process into effect are also included in the 4PL.
Fourth-party logistics are the companies that can provide solutions, coordinate more than one 3PL company in an organization, provide information flow, and only be an intermediary or giving service. These companies focus on realizing all items in the supply chain with professional solutions.
Fourth-party logistics companies provide transportation services with a functional approach that combines research, follow-up, support, and management from start to finish.
In the same way as 3PL, 4PL is used for the same purposes, but e-commerce is also involved in 4PL.
What are the advantages of 4PL?
Outsource usage in logistics; saves warehouse space, tools, labor, and operating costs. 4PL logistics providers perform supply chain management to increase the brand value at every stage of logistics, from the raw material source to the final buyer. This is especially important for companies that offer value-added services to gain a competitive advantage and to operate for more extended periods. 4PL logistics offers the user uninterrupted and standardized supply chain management. This standardization; covers added value such as packaging, return logistics, labeling, stock, and quality control. Thanks to the supply chain management that provides a quality standard, both the customers receive the same quality service, and logistics activities are carried out without any problems. 4PL logistics gains complete control over the vast information network using different resources. This enables you to offer comprehensive solutions per customers' requests and ensure that they are satisfied with your company's services.
Differences Between 3PL and 4PL
- There are no assets such as shipping or warehouses in 4PL.
- Unlike 3PL services, 4PL services include the integration of companies in logistics management and system optimizations.
- Unlike 3PL, 4PL companies aim to achieve the highest level of efficiency.
- While 4PL companies audit all the services performed by the manufacturer, 3PL companies focus on the logistics processes that must be carried out by themselves.
- 4PLs have more resources. The repository is one of these resources.
- 4PL offers a technological infrastructure for inventory management software that provides access to inventory status from a single location.
- 3PL focuses on day-to-day operations , 4PL focuses on optimizing the supply-chain.
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