While market volatility and the rise of the omni-channel marketplace have created significant challenges for manufacturers and retailers, these trends have also created huge opportunities for their logistics partners.
As manufacturers and retailers work to control costs — while increasing their responsiveness — third-party logistics (3PL) providers have become a critical resource. According to the 2014 18th Annual Third Party Logistics Study published by Dr, John Langley, 72 percent of shippers are planning to increase their use of outsourced logistics services in the future.
This is certainly good news for 3PLs, but that same study revealed an “IT gap” that vendors must close in order to add even greater value for their customers. A full 97 percent of shippers believe that the continued success of their global supply chains depends on managing data, as well as leveraging it to make better decisions. Yet only 55 percent of shippers are satisfied with the information technology services delivered by their 3PL partners.
Going Beyond the Tactical — to Provide Real Strategic Value
The Langley report revealed that, when it comes to adding value via technology, shippers view their 3PL partners as tactical, rather than strategic. For example, 76 percent of respondents said they rely on logistics providers for electronic data interchange — but only 42 percent see 3PLs as a true partner in advanced analytics and data mining.
The fact is, 3PLs represent a veritable warehouse of market information and customer insights for their customers. Logistics providers know who is ordering which products, how demand varies from month to month, how customers like to receive shipments, and other key business facts. While this data is currently applied at a low, operational level, it can actually add tremendous strategic value — and help manufacturers and retailers meet their core challenge of managing volatility.
Imagine if a 3PL partner could suddenly begin providing real-time input to the demand planning and sales forecasting functions. Or if that logistics provider could mine its wealth of data to create new product bundles, value-added services or delivery options based on actual consumer needs. Suddenly that company would be able to stand out from every other 3PL — and become viewed as a real strategic partner, versus a capable service provider.
From Vision to Reality: Learn More on December 4
This vision may seem futuristic to many 3PLs, but the truth is that many third-party logistics companies are already moving in this direction.
To help more 3PLs add strategic value, on December 4 at 11:30 Eastern JDA will host a webcast called “Why Now Is the Time to Close the 3PL IT Gap.” Co-hosting the webcast with me will be Dan Gilmore, Editor of Supply Chain Digest, and Gene Tyndall, Executive VP, Tompkins International.
During the webcast, we’ll discuss such timely questions as:
- How has the rise of the omni-channel marketplace affected 3PLs’ need for higher-powered IT capabilities?
- What are the obstacles and opportunities for 3PLs as they attempt to adopt higher-value technologies?
- What are the leading 3PLs doing right now to add greater customer value via technology?
I promise the webcast will be fast-paced, interesting and informative — so register today. If you’re unable to attend, an archived version will be available soon after December 4. However, you still need to register in order to receive the on-demand webcast link.
It’s an exciting time for 3PLs, as manufacturers and retailers increase their reliance on outsourced logistics. The key to lasting success is looking beyond short-term, tactical logistics services — and becoming a strategic partner for the long haul.