3PLs Benefit from 2019 Boost in Supply Chain Technologies

3PL providers use technology for competitive advantage

Recently supply chain operations have thrived on change, a seemingly endless flow of information, new technologies and chaos.  Starting a new year, we thought it would be a good idea to take a quick peek on how technology is impacting the world of third party logistics today.

 

Greater Reliance on Technologies

Increased need for 3PLs to serve as IT service providers

According to the annual 2018 3PL Study produced by Korn Ferry, Penske, Penn State and Infosys Consulting, there has been a 10% increase in shippers outsourcing information technology services to 3PL companies.  Today, both shippers and 3PL warehouses rely on the process of collecting, transmitting and analyzing larger volumes of data to power more efficient decision-making.  Using supply chain data is vital to enhancing efficiency, decreasing volatility and improving asset utilization.

Advanced technologies are being used by 3PL operations and shippers to power services, provide information visibility and reduce risk, eliminating uncertainty and challenges before the supply chain or warehouse operations are disrupted.

Today, customers expect fast, accurate, consistent response from their third party logistics providers.  Reliance on technology is critical as it facilitates the seamless flow of critical information seamlessly and accurately.  Decisions are increasingly data-based, and 3PL customers expect insight and analysis from their third party logistics provider.  More than ever before, customers are looking to their third party logistics providers for guidance and strategy with respect to their selection, implementation and use of technology.  Today’s 3PL must be agile and facile enough to adopt and adapt to change.

 

Technology is Driving the Workforce

Contrary to popular belief, using more technology in warehouses and distribution centers will not necessarily decrease the need for labor resources, but rather will change the requirements for the workforce.  Today, warehouse workers use automated forklifts and carts to do heavy lifting or rely on exoskeletons to help prevent potential injury.  These technological advances help warehouse workers do more in less time and help to prevent injuries. Automation is typically used to meet heavy duty fulfillment demands related to e-commerce, yet hiring of warehouse workers has actually increased.  As e-commerce continues to grow, so does consumer demand as well as the need for qualified warehouse workers.  Today’s warehouse workforce must be able to adapt well and learn fast and technology changes.  Technology is often a 3PL advantage, a reason for a shipper to outsource supply chain operations to a capable, technologically-proficient warehouse operator.

Today, the warehouse workforce needs to be comfortable using new systems and technologies. Today, technology aids humans in reaching their fullest potential and can be helpful in addressing specific tasks that limit individual or group achievement.  For example, supply chain and logistics executives rely on real time, accurate information to make and implement critical decisions.  Having the necessary data as well as actionable data is essential.  The 3PL workforce may have to learn, use and master many skills, technologies and systems throughout their careers to be successful.

3PL companies often continually invest in and upgrade warehouse management software, transportation management systems and other critical operating systems in order to have the best possible tools to optimize inventory, supply chain operations and transportation and logistics for their customers.  As customers continue to add more value-added services, 3PLs need to be able to capture and bill according to a multitude of billing strategies, contracts and for a wide array of new services.

In terms of technology, 3PLs are trending toward adoption of transformative supply chain software, using Big Data in combination with sophisticated analytics, more mobile technologies and cloud-based systems.  Use of technology is frequently noted to provide 3PLs with a competitive advantage in a crowded market.  Today 3PL customers have come to expect web portals as standard fare, as well as barcoding, network modeling and optimization, supply chain planning and transportation sourcing.  Customers of third party logistics providers reported that they often seek 3PL capabilities including yard management, advanced analytics, data mining and distributed order management.

 

Conclusion

Having and using cutting edge technologies is one way that 3PLs can attract and win new business.  In the past year alone, customers of third party logistics providers have increased outsourcing of information technology services to 3PLs, according to the 2018 3PL Study.  Shippers depend upon third party logistics providers for vital real time information and now expect insight and analysis will be provided to improve their decision making.

With today’s influx of technology, 3PLs can now offer a wider array of value-added services, get a boost in labor productivity, handle sophisticated supply chain management tasks and compete and win new business.

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