LONDON, March 30, 2006 -- The changing face of supply chain management in Europe - collaborative chains facilitated by transformational outsourcing - clearly reflects customers' growing demand for providers that are proactive in developing and transforming supply chain processes as well as in delivering services faster and more efficiently.

"Clearly, the market requirement is no longer for services alone, with customers increasingly seeking holistic, value-added solutions from their providers as well as long-term partnerships in which to share the risks and the rewards," notes Frost & Sullivan (http://www.transportation.frost.com) Research Analyst Malavika Srinath. "Technology innovations in the form of radio frequency identification (RFID), real-time location systems (RLTS) and other communication platforms are likely to support supply chain collaborations."

With these new supply chain business models gaining increasing attention, collaboration is taking place both at the single company as well as at the inter-organisational levels to leverage the revenue opportunities introduced by globalisation. Thus, logistics service providers that adopt collaborative models to strengthen customer relationships stand to gain significantly when compared to their competitors.

A significant number of providers in the European market are already actively involved in fourth-party logistics (4PL) type of arrangements, while others are evaluating new supply chain options and technologies with their customers as well as other lead logistics providers (LLPs).

4PL is a client-driven, collaborative, consultative solution that has tremendous potential in the European market. Revenues generated by 4PL are likely to grow from approximately 4.7 billion euros in 2002 to 13 billion euros in 2010. 4PL-type partnerships represent the next step in the evolution of the logistics industry and are set to pave the way for entering higher-margin and value-added businesses.

A majority of companies are at the second stage of the collaboration process, wherein they begin to recognise the immense savings they can realise in terms of resources when the relationship is mutually collaborative.

Organisations that are most likely to collaborate and be willing to change their supply chains radically are the true industry leaders as they are risk takers and are supported by robust supply chain foundations. These companies are likely to adapt to the changing supply chain structure much faster as well as realise great economies of scale from lucrative 4PL arrangements.

"However, new supply chains can fully succeed only when the value of collaborative communication platforms is realised," cautions Ms. Srinath. "Currently, difficulties exist due to the different levels of technological supply chain capabilities that are present worldwide."

The lack of a tried-and-tested industry model could also create concerns for providers that are actively considering investment in new supply chain models. Moreover, a higher level of trust between providers and customers is required for the collaborative business model to be effective.

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of the latest analysis of Collaborative New Business Models Supported by Innovative Technologies - The Route to Transformational Outsourcing in Europe, then send an e-mail to Magdalena Oberland, Corporate Communications, at magdalena.oberland@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city and country. We will send you the information via e-mail upon receipt of the above information.

Collaborative New Business Models Supported by Innovative Technologies - The Route to Transformational Outsourcing in Europe is part of the Logistics GPS subscription, which also includes research in the following markets: European Transportation Market, the Chinese Logistics Market and the Russian Logistics Market. All research included in subscriptions provide detailed market opportunities and industry trends. All research is evaluated following extensive interviews with market participants.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics and demographics. For more information, visit http://www.frost.com.

Contact:

Magdalena Oberland
Corporate Communications- Europe
P: +44-(0)-20-7915-7876
E: magdalena.oberland@frost.com