Assignment Task:
Dalia, the CEO of ContinentalShift, a 3PL, provides trucking-based transportation services as well as warehousing and distribution centres. The main focus of her company is on providing freight management and contract logistics. However, ContinentalShift is a 3PL that does not own assets, so the managed services are provided by other providers. According to Dalia, the core competence of ContinentalShift is in innovation, tech, people, and building and managing great relationship with both suppliers and customers.
Dalia is considering a move to 4PL to serve a select set of customers. She has supply chain planning service in mind. This would be added to the more traditional services they are offering as a 3PL such as transportation and contract logistics. She believes that the next logical step for her company, given her track-record with the great customer service they are offering, would be towards a more consultation role, more planning and advisory, so to speak.
They initially started to talk with one of their long-term customers, Rene Inc., a textile manufacturer. Rene Inc. produces textiles for vendors, retailers, and fashion designers all around the world. Rene Inc. maintains a network of "cross-docking centres" to help with their operations. They use them to deliver orders to stores. They are using several 3PLs to make these operations happen, and to manage the facilities under their control, ContinentalShift is their favourite. That is why ContinentalShift gets the largest chunk of Rene Inc.'s business.
So, Dalia called San, Rene Inc.'s SVP, to discuss the issue. San's initial response was that the idea sounded interesting, but San couldn't see how ContinentalShift could be both a 3PL and a 4PL to Rene Inc.
Therefore, now Dalia wonders if she should approach Rene Inc. to pitch the proposal of being their 3PL and add a 4PL-based dimension to this all, to advise and to plan services.
Questions
Q1. Should Dalia's company engage in a 4PL-based advisory and planning services to Rene Inc.?
Q2. What would the advantages and disadvantages to having ContinentalShift become involved in an advisory and planning capacity with Rene Inc.?
Q3. Assume that San accepts Dalia's proposal, regarding the current freight management and contract logistics at Rene Inc., what are some of the potential future complications that the new arrangement might cause?