One of the many worlds turned upside down by the pandemic was that of supply chain management and logistics. Old complacencies of immediate supply and sourcing abundance were dealt a quick and painful blow when countries closed their borders with almost zero notice.
Global shipping slowed to a crawl and inventory models fell over as unforeseeable events arrived in waves. Emptying shelves in empty stores made business leaders quickly aware of their vulnerability to just-in-time supply chains and protectionist behaviour from long established suppliers.
One business model that came into its own in those dire days was that of 4th Party Logistics. A much talked about activity coined by Australian John Gattorna in the 1990's, 4Pl has been the next big thing waiting to happen. And waiting and waiting.
Misunderstood as a consulting service or an add-on from big 3PL's (the owners of the trucks and boats and planes that make up the hardware of the logistics industry) 4PL seemed hard to define. Big 3PL's with big and diverse customer bases co-opted 4PL as an add-on to their sales programmes. Owning logistics hardware makes the financial model of 3PL's dependent on volume to cover high fixed costs. Convincing customers that your machine can be all things to all people is a way to secure those freight volumes.
High volume, asset heavy logistics systems cannot offer the flexibility needed to provide a "one stop shop". Ask the ops people dealing with customer complaints coming from the 20% of shipments that don't fit the machine.
So, for large customers' supply chains, a mix of service providers is needed. These platforms get increasingly complex and difficult to manage and businesses whose core competence is IT or retailing or mining or manufacturing become painfully aware of that.
Hence the role of 4PL. Partnering with their customers, providing outsource services using experience, technology and buying power, 4PL's optimise not only within each customer but across it's own platforms. Two levels of value and savings for customers.
The Active Supply Chains Group has been doing exactly that for large customers in Australia since 1998. The pandemic has confirmed their asset-light, high IP model provides the flexibility, agility and resilience customers need at all times, not just when supply chains get disrupted by once in-a-hundred-year events.
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