In my field, I visit many companies operating in the High Tech sector. Many of these companies are already used to working with so-called 4PLs (fourth party logistics). For all logistics activities within the supply chain, the 4PL is the first and only point of contact. It performs integrated direction and communication across the entire chain. With 100% focus and expertise, often aided by ICT solutions, they have a complete picture of all information flows and can continuously improve and make optimisations in terms of integrations, inventory costs, availability, efficiency, lead times, etc.
What I keep finding strange from the perspective of packaging and packaging, however, is that this is a topic within the supply chain that in practice still often prefers to be done in-house. Apparently, this is a subject that is easily overlooked, or whose importance may even be underestimated!
Outsourcing logistics is logical
It is logical that companies outsource logistics to a 4PL'er because achieving an agreed service level (SLA) and Total Cost of Ownership (TCO) are becoming increasingly important topics and crucial to making and keeping a customer happy. In addition, with the increasing globalisation and complexity of today's supply chain, it is increasingly difficult to manage it. Outsourcing various activities within the supply chain (such as logistics) then offers a host of advantages:
-Increasing focus on one's core business;
-Access to quality resources and expertise you don't have internally (or want to build up yourself);
-Increasing reliability of the specific activity (risk management);
-Reduce and control (operational) costs;
-Increasing productivity and efficiency;
-Flexibility and scalability;
-Releasing own resources for other purposes;
-Reducing the number of suppliers to a single point of contact
-Be able to make use of economies of scale that are not possible in-house.
Servitisation - Logistics as key to success
Servitisation is currently an increasingly important business model when marketing capital goods in the High Tech sector. This involves a shift from selling a product to selling a product-service system. Your product then actually becomes the platform for delivering services that should add value for your customer! The reliability and professionalism of all logistics facets surrounding this "total care" then becomes even more critical to your success. Your performance directly reflects on your image as a reliable partner. Simply put, you can no longer afford to send parts out into the world "at random".
4PP (Fourth Party Packing) – Is packaging being overlooked?
Whilst 4PL is often mentioned in the same breath as logistics, there is often hesitation when it comes to packaging and packing to bring in external expertise. Yet your logistics are, after all, inextricably linked to packaging. The role of packaging within the supply chain – and consequently the risk of damage it poses – should not be underestimated. Furthermore, the efficiency improvements and cost savings across the supply chain are often not recognised or acknowledged.
Recently, I came across the example of a terribly sensitive and very expensive part. All the requirements and specifications for when it had to be air-freighted to the other side of the world had been very well thought through. So, in the spirit of "better safe than sorry", an extremely good but also expensive packaging was developed. And what turned out? Nine out of 10 shipments with this component were carried locally by road transport. Because the packaging was designed for a one-way trip, the instructions were to scrap it after arrival. Quite a lot of capital was destroyed before this came to light....
An example of which shows that in practice, unfortunately, there is often no real integrated supply chain approach or policy. The functionally built-up structure of most organisations means that packaging can unwittingly be a real value drain because no one has over-all process responsibility. And this while the strategic importance of sound and integrated packaging management is only increasing for many companies. Should we perhaps call a party that takes the entire care around packaging out of its hands 4PPs?
Ed Klijsen - packaging expert
