Supply Chain 5pl's

Topics: Supply chain management terms, Logistics, Work in progress Pages: 3 (583 words) Published: September 2, 2012
Fifth-party logistics (5PL).

5PL is, indeed, a relatively new concept and seeks
to combine a number of core elements, all
functioning as a single entity via a web-enabled

The recognition that any supply chain consists of
three basic elements: materials – raw materials,
work in progress or finished goods; units of
storage/movement – a ship, train or truck being
nothing more than a moving storage unit; and

Detailed mapping of individual and collective
processing units to eliminate waste in all areas

4PL optimising and managing the equipment,
shipping, transport and storage functions in order
to obtain collective, and thus larger, economies
of scale
Integrated systems for real-time visibility of all
materials throughout the supply chain and to
effect a seamless production trigger from the
point of purchase/order to the point of final
The strategic alignment of, and collaboration
between, normally disparate companies into a
cohesive collective seeks to achieve waste
elimination on a scale perhaps financial controllers
could only once dream of. But the interesting point is
that most of the elements of 5PL have, in fact, been
effective on a standalone basis for some time, albeit
lacking the cement to bind them all together in an
efficient manner.
5PL operates on both a feed-forward and
feedback basis in order to complete the visibility
cycle of materials at any point in the overall supply
chain. Thus, an order for materials or finished goods
on the feed-forward loop automatically generates a
feedback response once materials are located and
shipped forward to the next stage. This works
irrespective of whether materials or information is
fed forward or back within the supply chain.

Despite all the hype, there is, in reality, no such
thing as just-in-time in the sense that production is
perfectly matched to consumption and materials
delivered to the production line exactly...
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