The terms 3PL and 4PL are often mixed up and some claim to be 4PL providers when in reality they are only 3PL service providers.
What is 4PL?
In layman terms, fourth-party logistics is a model in which manufacturers hand over their entire supply chain and related planning to a 4PL provider.
What is 3PL then?
The 3PL model is where the manufacturer retains the intelligence, planning and financials of supply chain but outsources the rudimentary processes like warehousing, shipping, packing, and distribution to a 3PL provider.
As a 3PL provider, Goldie Group will work with a mobile device manufacturer or a carrier for that matter by providing services like provisioning, packaging, kitting and storing the products as well as distribute them to retailers and customers.
But as a 4PL service provider to the same customer, Goldie Group will provide demand forecasting, CPFR strategies, stochastic modelling for supply, and much more intelligent software, technology and design solutions.
There are, of course, some other important differences between the two types of providers:
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The pandemic set a lot of small businesses in disarray. They had to turn to 3PL service providers to manage their logistics whereas the medium-to-large enterprises continued to seek 4PL services as usual
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4PL companies provide optimisation and collaboration in CPFR strategies whereas 3PL providers focus primarily on operational functions
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4PL companies often contract 3PL providers to carry out logistics services for them.
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4PL providers allow companies to focus on their products instead of dealing with the complexities of their supply chain.
