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About the Author

Nathan Pieri
Senior VP, Marketing & Product Management

Amber Road

Nathan Pieri is the Senior Vice President of Marketing & Product Management for Amber Road and has over 20 years of marketing, product development and management experience at enterprise software and technology companies. Nathan has been with Amber Road (formerly Management Dynamics) since 2002 and is responsible for managing the product portfolio and leading the worldwide marketing of the company’s Global Trade Management (GTM) solutions. Prior to Amber Road, Nathan has held senior-level marketing and product management positions at Celarix and Baan.

Supply Chain Comment

By Nathan Pieri, Senior VP, Marketing & Product Management, Amber Road

July 5, 2012

Using a Supply Chain Control Tower to Become Your Own 4PL

For Some Companies, it Might be the Natural Outcome of Centralizing Supply Chain Operations and Data into a Control Tower

As more organizations are moving toward heightened supply chain visibility, many are coming to realize that what they’re also doing is becoming their own fourth-party logistics (4PL) provider. What’s a 4PL? The term was coined by Accenture (when it was Andersen Consulting) and is defined 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.”

Pieri Says:

Centralizing supply chain data and processes as a self-4PL gives companies the flexibility to plug in new logistics providers using standard interfaces and configurable processes.
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Essentially, a 4PL is like a general contractor for logistics. Typically, it is a neutral party that will help unify and reengineer supply chain processes, while coordinating the activities of 3PLs and other supply chain partners. However, companies that have embraced supply chain as a core competency are seeing value in assuming the 4PL role themselves to meet their specific supply chain goals. The activities are managed from centralized hubs of technology, people and processes – frequently called “control towers.”

The concept of a supply chain control tower has been gaining momentum over the past year. A control tower is a single command center for visibility, decision-making and action, based on real-time data. With a control tower in place, taking on the 4PL role allows organizations to accelerate collaboration and achieve higher levels of performance among their varied providers.

In addition, centralizing supply chain data and processes as a self-4PL gives companies the flexibility to plug in new logistics providers using standard interfaces and configurable processes. This eliminates lock-in with a particular 3PL or system and puts the company in a position to control interactions with trade partners. Control tower managers gain deeper visibility and can use data-driven analysis of service levels to objectively manage each provider.

Further, by collecting and analyzing data from supply chain processes, managers can measure performance according to standard metrics. With business intelligence tools, managers can perform “what-if” analyses to optimize sourcing or distribution decisions, pinpoint a process breakdown that results in excess inventory, and right-size inventory based on actual cycle times and variability.


Final Thoughts

Being a self-4PL may not be right for companies that don’t yet have the resources or expertise to manage all aspects of their logistics and supply chain. But for others, it might be the natural outcome of centralizing supply chain operations and data into a control tower.

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