4PLs: Who needs a load of old assets?

Supply Chain Management & Services Ä Success strategy for 4PLs (Fourth Party logistics Providers)>> was the working title of the first logistics conference held by the Kuehne Foundation. It took place on June 13 and 14,2002 at the headquarters of the Kuehne & Nagel Group near Zurich (Switzerland).The organisers themselves were not sure whether an exclamation mark or a question mark should be appended to the conference title.

The challenges

"The globally networked logistics industry will demand a considerable degree of additional specialist knowledge from workers at all hierarchical levels and in all affected industries, because the management of increasingly global logistics chains will become an ever more complex task," said Klaus Michael Kuehne. president of the foundation's hoard in his opening address. <> Kuehne continued.
4PL provider is the industry's latest buzzword. Some companies believe that with the 4PL they have discovered a kind of magic wand which at a stroke can yield cost savings and improvements in efficiency and flexibility. <> Kuehne added,
< <> Blochmann emphasised. TXL is a completely neutral agency. As such it assumes responsibility for the selection of participants and the performance of the complete service.

A practical example

We have created the product <> for shipowners. The big shipping lines like P&O, Maersk Sealand and the terminal operator Eurogate all faced the same problem.>> Blochmann explained. < In response to the above situation, Netlog, a subsidiary of TXL. developed the first private hlocktrain system for the transport of ocean containers, which has now been operational since June 26, 2000. Blochmann listed the following advantages for the customers: reduced Costs, a dedicated transport network with enhanced reliability, enlarged scope for customised design of the future network and increased independence.
Blochmann is not an advocate of one stop shopping but rather of the theory i.e. ensuring that the customer has one contact person in the company. His advocacy of this position is grounded in his long-term experience in the logistics industry.

Pros and cons

Guntram Begie, senior vice president product line management commodity Europe with the Swiss elevator and escalator maker Schindler AG. and Dr. Stefan Kreidler, Schindler's supply chain manager new installation and modernisation Europe, introduced their new EuroLogistik concept (see ITJ 45/01, page 38) Schindler was awarded the Swiss logistics prize 2001 and the <~ of the European Logistics Association (ELA) for the radical way in which it remodelled its logistics processes.
In the discussion, Kreidler made it clear that Schindler would not surrender control and management of its supply chains, which is understandable, as the company has invested much time and money in its logistics strategy and has been rewarded with considerable success.
In contrast, Walter Leu, logistics director of the Swiss retail chain Manor AG. Basel. seemed to be ready to outsource at the <. Manor AG. which belongs to the Geneva-based Maus FrŠres Group, was the winner of the El Award in the year 2000.
Adi Stahuber. vice president Fast and Central Europe at i2 Technologies, said in his lecture that cooperation in the supply chain was not actually driven by IT systems." It is the people that matter,>> underlined
Stahuher and challenged managers to display more entrepreneurial spirit. All too often, he said, they were prisoners of the past.

Logistic concepts are attractive for SMEs

Prof. Helmut Baumgarten. modet ator of the conference and director of the Institute for Technology and Management and head of the Logistics Department at Berlin's Technical University (Germany). summarised the lectures and discussions in a plenary session as follows:
ú the management of flexible supply chains with variable material flow paths poses new challenges,
ú the industry is seeking reliable solutions that reduce operational management outlays,
ú up to now no satisfactory universal electronic information exchange system has been available. Innov alions arc ultimately driven by people, not IT systems,
ú the introduction of continuous supply chain management systems demands the availability of personnel and financial resources, which Ä if at all Ä are only available to larger companies. Therefore the 4PL concept is especially attractive for small and medium-sized enterprises.
ú up to now there has been a lack of comprehensive. sophisticated 4PL concepts and their track record has been too short to provide a basis for confidence in the 4PL idea on the part of industry,
ú the theoretical 4PL will not exist in practice or at least not in its full theoretical scope. In future 3PLand 4PL services will he combined.
ú the 4PL philosophy will influence both internal and external company-specific
strategies. baf