Caragher explains that international transportation management involves systematic and operational elements. On the systems side, this means building out TMS capabilities, especially end-to-end visibility. On the operational side, it means building out the global forwarder model to ensure that all regions are served by partners with skills and capabilities that meet customers' needs and that tie into the Menlo system.
Value engineering or applied engineering at the 4PL level represents a continuum of 3PL engineering activity, Caragher says. At the 3PL level, applied engineering looks for ways to drive out costs and inefficiency, while providing the customer with all the services he wants. "As you move up the spectrum to 4PL engagements, you take a broader supply chain view, looking at such things as reducing time to market, evaluating working capital and leaning out inventory levels," Caragher says.
As an example, Menlo is helping one manufacturing 4PL client determine where it should be producing its products today and in future years, he says. "We run simulations that look at various factors, including projected demand, labor availability and cost, and the cost of inventory,manufacturing and transportation," says Caragher. Simulations also are used to help clients determine the best stocking locations, based on their individual service and cost parameters.
The third 4PL cornerstone, strategic collaboration, refers to where 4PL activity sits within an enterprise, Caragher says. "We become an extension of the customers supply chain team with a true end-to-end perspective, which is really required in many global operations," he says. "We try to provide a strategic element, using our tools and software to help clients analyze key variables going forward and understand how decisions will impact supply chain operations."
Caragher acknowledges that the 4PL model is not right for everyone. "A company has to have an open culture and be willing to break down silos to look at the supply chain as a whole," he says. But if they are ready to take that step, the benefits can be great. "Companies like Menlo can provide knowledgeable people in parts of the globe where customers may not want to invest. That, plus the flexibility that 4PLs offer, can provide an real advantage," says Caragher.
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Keywords: Aberdeen Group, Third-Party Logistics, Global Logistics, Value-Added Services, Inventory Planning & Optimization, Logistics, Network Design, SC Planning & Optimization, Supply Chain Visibility, Transportation Management, Warehouse Management, Supplier Relationship Management, Business Intelligence & Analytics, Business Strategy Alignment, Supply Chain Analysis & Consulting, Global Supply Chain Management, 4PL vs 3PL, 4PL defined, 4PL perspective of supply chain management
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