Case Study Third Party Logistics

Introduction

Over the last few decades, the consolidation and practice of Supply Chain Management (SCM) concepts has led the logistics service provider business (3PL – Third-Party Logistics) to play a more comprehensive and integrated role with its clients. Following this trend, new configurations of this role have appeared, such as logistics integrators (4PL – Fourth-Party Logistics), which combine the management and operation of supply chain logistics (Sahay, 2003)

UPS, the one of the leading 3PL, has also been trying to enter the 4PL market to renew another glory again. In UPS official web site, it 4PL service is clearly labeled. “With our proven 4PL capabilities, UPS Supply Chain Solutions offers customers a full-service portfolio, including

2 case study Accenture

Accenture is a global management consulting, technology services and outsourcing company, with approximately 323,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies.

The concept of a Fourth-Party Logistics (4PL) provider was actually first defined by Andersen Consulting (Now Accenture) as an integrator that assembles the resources, capabilities, and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions. Whereas a third-party logistics (3PL) service provider targets a function, a 4PL targets management of the entire process.

One of Accenture successful example was that Accenture work with Shell corporation, as a result, Shell achieved operational and financial optimization. This case can be seen generally that a combination of a “pure play” asset light 4PL service provider’s operation technology and networks together with a range of 3PL providers’

 Standing in the top of the logistics structure, Accenture provide suggestions how to select a logistics operator.

 Accenture combine the Shell’s business nature with other 3PLs’ operations together, making the logistics system more efficient and effective. For example, safety exposure was improved as approximately two million miles were eliminated, resulting from better road transport planning and scheduling.

 Accenture designed a solution that was able to integrate capital projects and drilling operations into one 4PL operating model and designed a governance structure which included the operational and contractual interfaces with the relevant contractors.

With the support of Accenture, Accenture claimed that the logistics cost of Shell reduced almost 25 percent due to the improvement of transport utilization and supply chain integration. The service level raised and supply chain risk draw down, respectively. Because of the training program mentioned above, Shell’s team could implement better reporting and analytics