Cliff's Notes
The Role of 3PLs and Technology: End-to-End Visibility
When we talk with potential customers about their logistics challenges, they often express frustration regarding their current information systems. They may lack end-to-end visibility tools or have trouble integrating data from multiple WMS systems. Bottom line: they realize that substandard IT capabilities are preventing them from establishing an optimal supply chain.
Technology has always been critical to sophisticated 3PL operations and has become a standard expectation of all good 3PLs. Complex operations require advanced software solutions that offer end-to-end visibility and robust functionality across the entire supply chain.
Technology Trends
Today, integrated systems are becoming mainstream. We routinely see manufacturers, retailers and distributors looking for full-blown ERP’s that include end-to-end visibility tools as well as integrated WMS, TMS, packaging, order entry, order management and reporting functions. And these technology requirements are constantly changing as overall enterprise and business goals change and markets shift.
What forces are driving these changes? The visibility of data related to product locations and status, the centralization of information, and economic efficiencies (turn cycles, inventory accuracy, etc). As operations become more sophisticated and better manage labor and operator efficiency, productivity tools such as touch screens, hands-free operation, voice picking, etc., are also playing an expanding role.
Given recent economic conditions, 3PL users are expecting that technology investments are being made by the 3PL – with minimal pricing impact.
Unfortunately, many 3PLs are ill-equipped to accommodate this level of information technology. The latest Georgia Tech/Capgemini third-party logistics study indicates that many 3PL users still feel that their 3PLs are lacking when it comes to IT capabilities. The lack of integration among internal 3PL systems is the biggest recurring issue for 55 percent of shipper respondents.
Staying Ahead of the Curve
When outsourcing your logistics function, it is important to seek out a technologically savvy 3PL partner. A capable provider will offer end-to-end visibility tools and provide total systems integration. Ideally, they’ll provide a single view of customer data by running one WMS, one TMS, one transportation execution system, and one reporting system to ensure optimal data integration. A single integration system is most effective for managing data from and to the customer in real time or on a scheduled basis. Companies with multi-location operations should look for a 3PL provider that offers a single view of logistics information across multiple locations in real time.
Often, customers with established supply chains want their 3PL provider to adopt their existing systems. For example, they might be working with a WMS system that is not the 3PL provider’s standard option. It is important that the selected 3PL provider be experienced with many different systems and familiar with the vernacular, codes and processes of each to ensure a quick start-up and efficient operation. With this knowledge, the provider can assimilate into the customer’s operations instead of requiring both parties to learn new processes.
Another litmus test is to look for providers with experienced staff that regularly reinvest in their technology capabilities to stay current and operate at peak efficiency. For additional reassurance, verify that the provider has a state-of-the-art, real-time Business Continuity site that can keep operations running smoothly in the event of a natural disaster or other business disruption.
At Saddle Creek, we recognize the critical role that technology plays in the supply chain. We regularly invest in the latest technology, possess the resources necessary to provide a central view of data, and have developed an effective technology-oriented team with a combined total of 400+ years of logistics expertise. We’re committed to staying on top of our game. We know it’s in our best interest – and our customers’.
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Cliff Otto is president of Saddle Creek Corporation and Saddle Creek Transportation. He has more than 30 years of industry experience and has held leadership roles with the Council of Supply Chain Management Professionals (CSCMP) and several grocery industry associations, and served as national president of the Warehousing Education and Research Council (WERC).