Log4Chem says 4PLs have a role

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DIGITISATION • CHEMICAL PRODUCERS CAN BENEFIT FROM THE EXPERTISE OF SPECIALIST 4PLS WHEN THEY ARE APPLYING INDUSTY 4.0 CONCEPTS TO THEIR SUPPLY CHAIN

IT WAS ONE of those buzz phrases that came into the supply chain apparently out of nowhere – the control tower function. Everyone should have one, consultants said, and here’s some technology so you can have one too. A functional control tower will provide greater visibility to supply chain partners, especially to customers, giving them confidence in the company’s operations.

That’s true up to a point. But, as Kirry Mukherji, managing director of Log4Chem, explains, “All major shippers have a control tower function somewhere, maybe buried between ‘logistics’ and ‘customer service’.” So if companies already have a control tower, why do they need help?

“This function must now be promoted and technically enabled to give customers that home-shopping experience of shipment tracking and last-mile visibility,” Mukherji says. “It’s time to turn the light on.” An organisation can do that itself, but how many companies working in the chemical supply chain have the in-house expertise and resources necessary to achieve the required outcome?

Many companies, Mukherji believes, will also be changing their enterprise resource planning (ERP) systems to help them cope with the management of increasingly large volumes of information and provide interconnectivity between corporate platforms. This never-ending process of migration is a drain on capital and, for many operators, it makes more sense to outsource the task to a fourth-party logistics provider (4PL) such as Log4Chem. FINDING SAVINGS “As a chemicals 4PL, we have proven that it is possible to cut costs and add more value simultaneously. Selective digitisation with a team of chemical logistics experts has enabled us to reduce operating costs while improving the transparency and reliability to end customers,” Mukherji says. “It’s a simple formula – delays cost time and money; remove the problems and you improve performance while cutting costs.

“Here is just one example: your ERP allocates a lane to one carrier, at best with a back-up carrier. The granularity of big data makes this ‘one-size fits all’ approach anachronistic,” he continues. “Our dynamic allocation management gives a defined group of pre-approved carriers the flexibility to opt in and out of lanes as it suits their business. This benefit (and lower risk) for the carriers yields additional margin that is sustainably greater than the cost of our intervention.”

Mukherji believes that the arrival of big data and greater visibility through the supply chain is making old metrics redundant. “An overall delivery performance of 99 per cent has become irrelevant,” he says. What is crucial is the actual experience of each individual customer relative to their expectations. “We can pinpoint that silently suffering customer that has less than 75 per cent on-time deliveries and take corrective action before they silently leave you.”

These abilities give the lie to the belief expressed by some in the business that digitisation will, by disintermediation, remove the space for 4PLs. “Elements of what we do have already become redundant,” Mukherji allows, “but that stimulus has propelled our growth, evolving further up the value curve. We continue to save our customers millions more than we cost them.”

Log4Chem GmbH is a 4PL focusing exclusively on the European chemicals industry, building a customer base over the past decade through carrier-neutral transport management and optimisation. This gives Mukherji the confidence to be able to say: “You can do it yourself – or give it to us. We know how!” HCB www.log4chem.com