4PL or Outsourcing is subcontracting a process to a third-party company. It involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider. Strategic outsourcing emerges when firms rely on intermediates such as Agrologistics to provide specialized capabilities & expertise that supplement existing capabilities along a firm’s value chain. The client organization and the supplier enter into a contractual agreement that defines the transferred services
Outsourcing creates value within firms’ supply chains in many ways:
- Lowering costs
- Clients focus time & energy on their core business competencies
- More efficient use of people, capital, IT and resources
