Fifth Party Logistics model comes closer – 5PL

Fifth Party Logistics model comes closer – 5PL

I noticed that the logistics landscape is not clear for everyone yet. Especially not for ‘outsiders’. In the meantime, people are confronted by logistics daily. Even if it is only that your packages arrive on time at home, in the warehouse or ‘yard’. Fifth Party Logistics model comes closer – 5PL.

Logistics is very dynamic and more and more IT-driven

The logistics landscape moves all the time, mostly because of the progressive IT possibility. In this blog I will try to explain what 5PL adds to the logistics network. In my next blogs I will discuss in depth the actual software functionality.

From 1PL until 4PL at a single glance

The infographic below shows what traditional Party logistics can mean for the supply chain.

Fifth Party Logistics model comes closer – 5PL


[Thanks to source: Cerasis]

The 5PL added to the logistics landscape

What is 5PL? 5PL looks like 4PL. It is quite a new concept that has been circulating in the supply chain world. A 5PL develops, organizes and implements logistics solutions for a principal or another contracting party with a focus of using the latest technology. This is the case when the normal supply chains become supply chain networks. A 5PL service provider controls the supply chain networks. The industrial player wants to receive strategic, innovative logistics solutions and concepts of third parties.

The 5PL is often associated with e-business

What is the technology that is used by 5PL service providers in the supply chain?

A 5PL service provider optimizes supply chains and controls a network of supply chains with a strong e-business focus around all the logistics operations, which is different from the 3/4 PL service providers.

From Supply Chain to Value Network

What is the added value of a 5PL for the supply chain?

The objective of a 5PL is to create visibility, collaboration and predictability in the supply chain and between supply chain networks and to fully use e-business [for example: supply chain portals and webshops] and data-analysis [big data]. So, improving the provision of information in order to take the right action at the right time. Of course, it should definitely not lack a non-conformity dashboard for performance-management and being able to anticipate!

The increased availability of different data (both transaction level, content and information) can be analysed faster as a result of the available IT-tools. Data-analysis provides insight in tactical and strategic direction and the possibility to control the supply chain. Because of this it is possible to give just-in-time and smart recommendations and to take action in the supply chain.

It does not require an explanation that these developments – extended supply chain visibility – are a real progress regarding to the focus on profitability (ROI) of the supply chain and in the supply network.

Example: thanks to WarehouseAnywhere:

Fifth Party Logistics model comes closer – 5PL

Author is Harry Luijk – Logistics & Supply Chain Professional and Partner at Merlyn Consult.

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