Logistics management is an integral factor in the success of any manufacturing company’s operations and has a direct impact on their bottom line.

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Logistics dissected into 3PL and 4PL
eTailing India Thought Corner
Logistics management is an integral factor in the success of any manufacturing company’s
operations and has a direct impact on their bottom line.
How is Logistics Management Defined?
Logistics management is the governance of supply chain functions that includes transportation
management, fleet management, warehousing, materials handling, order fulfillment, logistics
network design, inventory management and planning of supply/demand.
An important aspect in the overall design of the logistics systemis the choice to directly
manage logistics functions, or to outsource them to a third party through a contract
mechanism. For instance, rather than operate and maintain a fleet of vehicles and drivers, a
transportation company can be hired to transport the commodities from the supplier to the
recipient (e.g., from the regional warehouse to the district warehouses in the region). An

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advantage to outsourcing is that functions are assigned to companies that specialize in that
particular function. A perceived disadvantage to outsourcing is that you have less direct control
over that logistics function. Outsourcing can take many forms and phase which involves all or
only some commodity management functions.
Today, let’s shed a light on 3PL and 4PL
What is a 3PL?
A third party logistics company is one that works with shippers in order to manage another
company’s logistics operations department. 3PL is the action of outsourcing activities that are
related to logistics and distribution.
What is a 4PL?
The concept of a 4PL provider is an integrator that accumulates resources, capabilities and
technologies to run complete supply chain solutions.
Main Difference between 3PLs and 4PLs
The 3PL targets a single function, whereas the 4PL manages the entire process. A 4PL may
manage the 3PL also.