LLP business model
3PL to 4PL Lead Logistics Provider (LLP) Business Model
By Trevor Barrows
1 Executive Summary
A 3PL or third-party logistics provider is defined as a company that provides logistics services for its clients and customers, where as a 4PL or fourth-party logistics provider is defined as a company that provides logistics services that manages a group of logistics providers that perform 3PL operations, including value add services.
Driven by supply chain forces 3PL’s are consolidating into 4PL service providers more commonly called
Lead Logistics Provider (LLP). Given increasing pressures for speed, flexibility and global reach, the
LLP role provides greater functional integration, and assumes more operational responsibility.
Increasingly companies must collaborate in engaging an enterprise logistics system that integrates to manufacturing, enterprise-requirements planning, and warehouse management systems to optimise the entire supply chain, not just transportation, for improved supply chain performance and competitive advantage. To gain the speed and global reach of today's supply chain, it is necessary to create new ways to source capabilities. It is necessary to collaborate rather than purchase. It is necessary to share authority rather than direct outcomes. It is necessary to integrate the supply chain functions more broadly. To do this requires know-how and resources beyond the capabilities of a single organisation(s).
Trevor Barrows has found that assisting companies in creating a distinct LLP organisation is a path to greater competitive advantage. A LLP organisation brings focus to the supply chain in which all parties share sourcing because the successful LLP organisation is founded on principles of shared risk and shared reward.
The scope of today's business requires greater functional integration of the supply chain. This integration is critical to achieving speed, precisely described service and optimal cost. It is no longer
By Trevor Barrows
1 Executive Summary
A 3PL or third-party logistics provider is defined as a company that provides logistics services for its clients and customers, where as a 4PL or fourth-party logistics provider is defined as a company that provides logistics services that manages a group of logistics providers that perform 3PL operations, including value add services.
Driven by supply chain forces 3PL’s are consolidating into 4PL service providers more commonly called
Lead Logistics Provider (LLP). Given increasing pressures for speed, flexibility and global reach, the
LLP role provides greater functional integration, and assumes more operational responsibility.
Increasingly companies must collaborate in engaging an enterprise logistics system that integrates to manufacturing, enterprise-requirements planning, and warehouse management systems to optimise the entire supply chain, not just transportation, for improved supply chain performance and competitive advantage. To gain the speed and global reach of today's supply chain, it is necessary to create new ways to source capabilities. It is necessary to collaborate rather than purchase. It is necessary to share authority rather than direct outcomes. It is necessary to integrate the supply chain functions more broadly. To do this requires know-how and resources beyond the capabilities of a single organisation(s).
Trevor Barrows has found that assisting companies in creating a distinct LLP organisation is a path to greater competitive advantage. A LLP organisation brings focus to the supply chain in which all parties share sourcing because the successful LLP organisation is founded on principles of shared risk and shared reward.
The scope of today's business requires greater functional integration of the supply chain. This integration is critical to achieving speed, precisely described service and optimal cost. It is no longer