As international trade volumes grow and competition for winning and keeping customers climbs, so does the business of third party logistics (3PLs) providers who deliver goods damage-free, accurately, on-time and cost efficiently. To compete, 3PLs must be specialists in transportation, warehousing and integrated operation services that are customized to their customers’ needs. To thrive, they must also be experts in information.
Today’s 3PLs are faced with a slew of challenges that only multiply as the company grows in size and scope. One challenge is as companies expand their supply chain logistics services across various vertical markets, they must support a wide range of information formats and protocols that transmit at hyper speed to ensure a shipper’s products reach their destinations, in compliance with SLAs. Any type of issue or disruption between the shipper’s information systems and those of the 3PL can have a significant impact on the customer relationship.
Regardless of the type of error possible across the supply chain, the ongoing challenge is to detect such conditions and remedy them before they disappoint your customer. In too many instances, it takes a customer complaint before the business is even aware of a mistake. Scrambling to then fix the problem costs time and money and transforms what could have been a positive experience for your customer into a negative one. In today’s busy, highly competitive 3PL environment, fix-on-failure can no longer be an option. But in reality, it’s in fact very difficult to improve operational performance and the customer experience when you are constantly reacting to unforeseen issues. It’s time to get proactive.
Know Your Customers’ Information Flow
To stay ahead of the game, 3PLs need operational intelligence and proactive insight into the information flows of their customers. Rather than learning from their (unhappy) customers that an inventory request has not been processed as promised, they have the data that will alert them to a possible problem, even before it happens. Anything less than that is bad for the customer, and bad for the 3PL’s business and brand.
How do you get there? Transforming to become a more proactive organization should begin with a focus on areas within the supply chain where proactivity will yield the most immediate benefits. You can start this process by first identifying which category of internal users you want to empower with actionable intelligence. Then, determine their operational objectives, and identify any issues that are preventing them from meeting those objectives. This approach will enable you to determine which proactive actions/decisions/information these users most urgently need to be able to take to improve operational objectives. Finally, identify the sources of data that need to be collected across the value chain in order to deliver the right level of actionable intelligence for your pre-defined set of users.
For example, a 3PL with the operational intelligence to proactively detect that a specific order volume is 30 percent lower than the norm can potentially help their customer avoid late or lost orders and minimize costly special handling fees. With a 360-degree view into IT applications spanning complex data integration and back-end applications, 3PLs are able to detect data issues before they have a negative business impact and build strong relationships with their customers.
The reactive culture that is unfortunately too prevalent in supply chain organizations today undermines a business’ strategic goals. 3PLs that embrace the power of timely, actionable information and understand that the flow of data within the supply chain is just as important as the flow of goods will be the companies to come out on top in this increasingly competitive space. They will reduce operations costs by minimizing the time IT spends investigating and researching issues, and in the process maximize IT focus on revenue-generating projects.
And finally, because information is most certainly a valuable commodity, 3PLs can and should use their IT systems as a competitive advantage. Operational intelligence will enable you to make faster, smarter decisions and that, in turn, will help you become a better partner.
Integration and Analytics in Supply Chain 