Outsourcing is Crucial for Global Supply Chain Success

Global growth consulting company, Frost & Sullivan, found that 80% of respondents to its study reached out to external partners, such as 4PLs. Based on a European model, the four drivers for these moves include the aim of reducing logistics operational costs, increasing globalization, having a single point of accountability and the need to focus on core competencies.

Those seeking to establish 4PL relationships approach them with the assumption that they already have an established network in the company’s area of operations and have a level of technical expertise equivalent to its requirements. This is according to Frost & Sullivan’s industry analyst, Sharat Satyanarayana.

He notes that, “customers, on average across all industry sectors, prefer to retain a majority control over key decisions such as the overall supply chain strategy, integrating the partners with certain key upstream processes, allocating the change agents and managing the 4PL alliance,” notes Satyanarayana.

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