The Internet is significantly changing the strategic behaviour of many businesses that operate in the global arena. Today, many multinational enterprises (MNEs) work closely with their logistics providers to enhance their competitive positions. They increasingly outsource their non-strategic business functions, with logistics providers picking up this new source of business. The MNE is moving more towards a ‘front-end’ or customer focused operation, with their key logistics providers aligning themselves as supply chain integrators. Logistics providers may be classified as 1st to 4th party logistics providers. A 4th party logistics provider provides complete supply side solutions for the MNE, plus a degree of demand side service. It becomes an integral part of the MNEs competitive solution set. This paper proposes that integrated, fully activated, demand-supply (FADS) chains provide a mechanism to move beyond 4th party logistics provider (4PLP) solutions. It elucidates the key clusters of skills levels that must be activated by the logistics provider to operate at the 5th party logistics provider (5PLP) FADS level of outsourcing and service. The 5PLP FADS logistics provider brings a vast array of ‘added-value skills’ to the MNE, and a key innovative, flexible and highly agile partnership results, whereby pathways towards ‘sustainable’ competitive advantage may be developed. The 5PLP FADS logistics model is the next step in the progression to total logistics integration.
Gunesh, Kailesh and Hamilton, John R., "Logistics – A Pathway Towards ‘Sustainable’ Competitive Advantage for the Multinational Enterprise" (2003). ICEB 2003 Proceedings. 181.