Fourth party Logistics

The term fourth party logistics provider was by Andersen Consulting. It refers to the evolution in logistics from suppliers focused on warehousing and transportation (third party logistics providers) to suppliers offering a more integrated solution. Among other services fourth party logistics providers include supply chain management and solutions, change management capabilities and value added services in their offering. These companies are basically third party logistics providers that either add these capabilities to their services or form alliances to provide the services.

In general the 4PL concept focuses on working together with client on transformation efficiencies thus redesigning not only the supply chain, by sometimes also the overall business process and internal.

Reverse Logistics

At the simplest level the disposition of returned goods consists of junking them or giving them away. But with more sophisticated systems and processes, returned goods can be back into inventory, sold at liquidation centers or broken down to component parts – steps that can cut costs and increase profits and improves customer service. How companies handle product returns can also be a competitive differentiator. It is a new area to exploit for increased efficiencies. Reverse logistics has become a key competence in modern supply chain.

The Council of Logistics Management (CLM) published the first known definition of Reverse Logistics in the early nineties (Stock 1992): the term often used to refer to the role of logistics in recycling waste disposal and management of hazardous materials; a broader perspective includes all relating to logistics activities carried out in source reduction, recycling substitution reuse of materials and disposal.

The European Working Group on Reverse Logistics RevLog (1998) puts forward the following definition by Dekker et al., (2003): The process of planning, implementing and controlling flows of raw materials in process inventory and finished goods, from a manufacturing distribution or use point, to a point of recovery or point of proper disposal.

This perspective on Reverse logistics keeps the essence of the definition as put forward by Rogers and Tibetan Lembke (1999). We do not however refer to the point of consumption or to the point of origin. In this way we give margin to return flows that were not consumed first (for instance, stock adjustments due to overstocks or spare parts which were not used), or that may go back to other point of recovery than the original (e.g. collected computer chips may enter another chain). ‘

The reverse logistics executive council defines reverse logistics as the process of planning implementing and controlling the efficient cost effective flow of raw materials, in-process inventory finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.

More precisely reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value or proper disposal. Reverse logistics is more than reusing containers and recycling packaging materials. Redesigning packaging to use less material, or reducing the energy and pollution from transportation are important activities but they might be better placed in the realm of green logistics. If no goods or materials are being sent backward the activity probably is not a reverse logistics activity.

Rev Log, a European reverse logistics initiative states that Reverse Logistics is a rather general term. In the broadcast sense, Reverse Logistics stands for all operations related to the reuse of products ad materials. The management of these operations can be referred to as Product Recovery management (PRM). PRM is concerned with the care for products and materials after they have been used. Some of these activities are, to some extent similar to those occurring in case of internal returns of defective items due to unreliable production processes. Reverse Logistics though refers to all activities to collect, disassemble and process used products, products parts and/or materials in order to ensure a sustainable (environmentally friendly) recovery.