In the business industry every organization focus on the customer demand which is important factor for them to deliver right product to right customer at right time to increase firms repute, customer service and firms profitability which whole the process supported by supply chain process and logistics services. The third party logistics (3PL) is an independent organization which performs a lots of logistics functions on the request of the purchaser company. Basically the 3PL is not take ownership of the product but they are liable to deliver right product at right time to the customer. Further the relationships between whole the supply chain parties are helpful and beneficial for the entire partners. Moreover, the fourth party logistics …show more content…
Further, 3PL manage many of outsourcing actions that related to logistics and supply.
Fourth Party Logistics (4PL)
The fourth party logistics (4PL) its new concept which means assimilation of resources, arrangement, management, technologies and capabilities to complete the supply chain process or give the supply chain solution.
The third party logistics still have immense demand in the market for producer and other shipping companies due to strong competition between simple logistics firms and dedicated firms. Further there are many reasons for 3PL companies to move towards 4PL market. Suppose increase profitability/returns, competition, value creation, and value added services, low capital investment, customization, and core competencies. Innovation, construct relationship between provider and client, information shearing and performance.
Increase returns
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Value creation means the performance of the product and services that creates value in the eyes of customer. Value creation is big role in the profitability in the shape of profit or revenue that depends on the supply chain partners which they create value at each level. How they provide value added services to them and play a vital rule to enhance value for customer. Further in 3PL industries only limited function perform by the partners so that’s why value creation is big problem but on the other hand 4PL is a solution of complete supply chain process which supported by the value creation. Further, with the help of value creation framework firm increase its cash flow, reduce cost, increased profitability or growth rate. Value creation and enhancement: back to the future (Aswath Damodaran).
Value added services
Every firm has great focused on the customer requirement what they want and how to satisfy them. The major reason of 3PL moves towards 4PL is value added services. The 3PL services mostly focus on logistics service or in-bound service. The services need to be increase and add some value for every 3PL firms when they have plan to move towards 4PL. value added service must be ensure the solution supply chain process for all partner and customers which also support return
Having spent the better part of 35 years in the shipping and cargo field, Craig Raucher has established many non-asset and asset based operations for DHL Worldwide Express, Total Freight Solutions Global, and Corporate Express Delivery Systems. His ability to determine whether the third party logistics company will retain and use their own assets or others has increased the profits of each
In a high competitive world market and with the increasing rational buyers a company can only win by creating and delivering the best customer value than the others competitors do. To succeed, a company needs to use the concepts of value chain.
4 company’s skills and objectives, the customers they were trying to attract, the competitors they
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer.
This assignment will cover how a business can gain a competitive advantage over similar businesses in the same market using sources such as cost advantage and differentiation. What will also be discussed is the value chain model made by Porter, and this assignment will explain what the model was actually designed for. Furthermore, it will be explained how a business can use methods of competitive advantage through various stages of Porter’s Value Chain in order to help it maintain and increase the competitiveness of the business, and this will be done through assessing the operations of the business and locating exactly where any competitive advantage can be gained. Lastly, Porter’s value chain features 9 activities which can each be identified as being either a primary or support activity and what will then be explained will be how these primary and support activities can add value to a business, and whether or not support activities can be considered as being any more or any less important than a primary activity.
‘Supply chain management integrates supply and demand management within and across companies. It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thir- party service providers, and customers’. (Web: Council for Supply Chain Management Pr...
Hum,Sin Hoon (2000), “A Hayes-Wheelwright framework approach for strategic management of thrid party logistics services”,Integrated Manufacturing Systems,Vol .11/2,pp 132-137
Logistics exists to satisfy customer requirements by facilitating relevant manufacturing and marketing operation. The main responsibility of logistic is the geographical positioning of raw materials, work in process and finished inventories at the lowest possible cost.
Value chain analyses a firm 's internal activities such as planning, production, and development, packaging and distribution so as to create value for clients. The function of the value chain is to identify the sources for cost reduction along with quality improvement. It means value chain is used to identify the strong and weak points, positive and negative points, the scope of improvement; in a nutshell, the advantages and disadvantages of the activities taking place in the system. The value chain is also called as a strategic analysis tool and it is a well-known concept in business management industry.
Delivering value. Finally comes delivering. It may be compared to place in the 4Ps approach. However, it is different because, while place requires just having a place where the customer can buy a product, delivering also involves making sure the customer will be able to get the most of the product.
Zanjirani F., Rezapour, S. & Kardar, L. (2011) Logistics operations and management concepts and models, 1st ed. London ; Elsevier.
It helps in increasing the value generated by your business at the various steps in the value chain by providing the business model specific to your manufacturing needs and operational approach as well as accelerating the plan of the business practices. Our Value Chain Services offer a widespread assortment of results designed to develop your company’s potential to accomplish amplified service levels, market share and profitability.
Value has different aspects which include company values; which relates to new innovations, job growth, reducing costs, as well as long term production and so forth. Value must meet customers’ needs which they benefit from the product or service.
Logistics companies around the world, for a very long time, had been using 2PL for a reasonable amount of time, which involves the transaction of movement of goods between two parties, after realizing that many manufacturing and service corporations were taking on too much responsibilities in doing too many things at once. From procuring to producing to transporting the product, that not only does it results in losses for companies in the face of ever rising expenses, which were proving difficult to control, but also because it was making employees lose their productivity, as they had to handle the nitty gritty details of the logistics operations which (aside from those responsible to handle them) made them lose focus on the tasks that they
Logistics is the designing and managing of a system in order to control the flow of material throughout a corporation. This is a very important part of an international company because of geographical barriers. Logistics of an international company includes movement of raw materials, coordinating flows into and out of different countries, choices of transportation, cost of the transportation, packaging the product for shipment, storing the product, and managing the entire process. The concept of logistics is fairly new in the business world. The theoretical development was not used until 1966. Since then, many business practices have evolved and logistics currently costs between 10 and 25 percent of the total cost of an international purchase.