Tag Archives: cscmp

Here’s Our Take on The Annual 3PL Study

Each year, Dr. C. John Langley looks forward to the final week of September and CSCMP Edge, the annual conference of the Council of Supply Chain Management Professionals. This year, Dr. Langley, Clinical Professor of Supply Chain Management at Penn State University, and a group of consultants sat on a panel discussion as they normally do to discuss their findings in the 22nd Annual Third Party Logistics Study. The Study is a collaboration between Penn State, Infosys, Korn Ferry, and Penske and can be found and downloaded at www.3PLstudy.com.

This year’s study covered a number of topics, with many of the findings less than surprising for keen watchers of the Third Party Logistics (3PL) industry and marketplace. The report focused on several macro-trends in the world of 3PL/Shipper relationships, including:

  • The rise of blockchain technology and related increases in supply chain visibility
  • Automation/Digitization in the Supply Chain, especially with respect to autonomous vehicles
  • Risk/Resilience in Shipper-3PL relationships to guard against uncertainties and supply chain disruptions, and
  • Logistics talent – a subject so thoroughly studied that reports and responses specifically focused here are readily available

For us here at Columbian Logistics Network, the discussion of those trends ranges from informational – as with blockchain technology – to redundant – as with the rise of self-driving automobiles and the gap in logistics talent across the country. What’s more interesting, however, is what can be found when looking at the differences between the perceptions of 3PLs and those of their customers (shippers).

The IT Gap

Professor Langley identifies “The IT Gap” as the difference in the perceptions of shippers and 3PLs when it comes to IT capabilities. Specifically, in 2017, 91% of shippers responded that IT capabilities are a necessary element of 3PL expertise, but only 56% of shippers reported that they are satisfied with the IT capabilities of their 3PL provider. This difference of 45% is referred to as the IT Gap, and it widened this year for the second year in a row.

What does this really mean when the rubber meets the road?  If 45% of respondents are unsatisfied with their provider’s capabilities, why aren’t we seeing more turnover in the industry?  Why aren’t shippers insourcing to get rid of their providers and close the gap? Does anyone even care?

The answers to these questions are far more nuanced than the report’s citation of shippers looking to providers to make analytical decisions. At Columbian, we have a few thoughts on why this gap might exist, and what we can all do to close it:

Business Goals – At Columbian, we like to say that for every customer we have, we see a different reason to outsource. Inherent in our business model is that we assist customer organizations in achieving their business goals, regardless of what those goals are. Sometimes those include IT capabilities, sometimes not.

Expectations – “Technology capabilities” may be very important to most shippers, but when pressed, many shipper representatives would struggle to explain exactly why that’s the case, other than that’s what they hear, or that’s what they read in an industry publication. Technology comes at a price, so it’s not a stretch to think that while a shipper may want its provider to upgrade IT capabilities, s/he may not want see financial value in it.

Communication – It seems elementary, but far too often, gaps in knowledge or expectations can be closed with simple communication. A robust request for proposal (RFP) process when searching for the right provider can weed out 3PLs with cultural differences that don’t meet a shipper’s needs. Even after implementation, a regular, formal review process ensures that 3PL performance and shipper business goals don’t drift apart over the duration of a relationship.

So what of the IT Gap? Is it a fabrication of an academic mind, explained only in a series of charts and graphs? Is it a fundamental pillar of the shipper-3PL relationship that causes pain either explicitly or implicitly? At Columbian, we’d love to have a deeper conversation. We would love to hear what investments in the forefront of IT capabilities would do for a shipper’s confidence in its 3PL. We invite the chance to discuss how to accomplish business goals with multiple tools, including but not limited to IT capabilities. Call us. Tweet us. Contact UsContact us through www.columbianlogistics.com. Come chat with us at our next Pints with Peers series happy hour. Let’s see if we can close that IT Gap through collaboration, insight, and meaningful discourse.

CSCMP Edge 2017

Join us at EDGE, Supply Chain’s Premier Event™

 

 

 

 

 

 

The Council of Supply Chain Management Professionals (CSCMP) hosts the must-attend supply chain event of the year — CSCMP’s Annual Global Conference, EDGE.

From leading edge content to cutting edge supply chain solutions, EDGE reflects the unparalleled resources CSCMP offers today and symbolizes our unwavering commitment to supply chain in the future.

Experience three information-packed days where you’ll:

  • Discover over 100 forward-thinking sessions covering real world strategies implemented to maximize and transform supply chains.
  • Learn from some of the brightest academics and practitioners in supply chain today.
  • Hear dynamic speakers and industry experts.
  • Explore the Supply Chain Exchange Exhibition where you can see, touch and experience the latest supply chain technologies up close and personal.
  • Network with leading, emerging and future supply chain leaders from all over the world.
  • Earn CEU’s (Continuing Education Units). Attend all 3 days and earn 15 CEU’s.

Visit CSCMP’s website for more information.

Lessons Learned From CSCMP 2016

As another successful CSCMP (Council of Supply Chain Management Professionals) Annual Conference wrapped up, we recently took some time at Columbian to reflect on what we had learned. As most supply chain professionals know, this business is constantly changing. There are always new technologies and ideas to learn. This year, we had six key takeaways from CSCMP.

  1. Amazon is king.
    Everyone is chasing Amazon; are either trying to compete with Amazon or be Amazon. Amazon is doing it right, and other companies want to do the same.

    “The way we chased Walmart 15 years ago is the way everyone is chasing Amazon today.” -Blair Thomas, director of customer care at Columbian

    Much of Amazon’s success stems from their supply chain management. Amazon is known for being faster to market than just about any other vendor of goods in the world. In some cases, you can get same day delivery. Why wouldn’t you want that for your customers? In effort to keep up with Amazon, some grocery retailers are allowing curbside pickup now with a distribution model known as “click and collect.” When will they take it to the next level and deliver to homes?  And when that happens, how will they remain profitable?
    According to an Innovation Enterprise article titled Amazon’s Supply Chain Process, “Emulating Amazon is a challenge that many will fail in, primarily because the economies of scale they have in place allow them to do so much at a fraction of the cost. However, their consumer-centric approach is certainly something to look at, and their use of frugality as a driver of innovation has the potential to inspire lower costs and new ways of working that could help compete with a behemoth such as Amazon.”

  2. Green is good.
    The demand for sustainability is not going away any time soon. Supply chains and logistics networks need to operate their business with environmental, risk, and waste costs in mind. Think about long term-profitability: first, a company needs to get the basics down. Think of the little things in your business that could increase sustainability, such as saving energy. Next, a company needs to learn to think sustainably. How are you going to embed sustainability into your supply chain? Consider supplier management, product design, manufacturing rationalization, and distribution optimization. Once your company takes a turn for the sustainable route, take time to look back and track what is working and what is not. This will help you going forward and save you time. This was a reoccurring theme in presentations at CSCMP, with presentations by industry and academic speakers alike.
  3. Everyone is still figuring out omnichannel strategy.
    When you sell to many channels, how do you have one supply chain? Omnichannel strategy focuses on creating a seamless shopping experience for consumers whether they are shopping online, over the phone, or in a store.  On the flip-side of that coin is the business decision of how to design and align the supply chain, and especially the distribution network, to service these very different markets.  How can a supply chain make this a uniform process that performs smoothly? Consider a maker of metal drawer hardware based near Columbian’s headquarters in Grand Rapids, Michigan.  While the company has embraced lean manufacturing and makes high-quality hardware, they have struggled in the past with how to sell and distribute the same drawer slides to major home site developers, big-box retail chains, and finally the “weekend warrior” who buys a single set of slides via Amazon.  One key takeaway we had from CSCMP is…they are not alone!  Many organizations have the same struggle to service multiple channels.  Brian Gibson from Auburn University has done a lot of work in this space, and gave a compelling case study with the help of the Retail Industry Logistics Association (RILA) called Omnichannel Supply Chains: Succeeding Amidst the Chaos.
  4. Sharing economy meets supply chain.
    There are disruptive technologies coming left and right. Years ago, the mobility of freight depended on load boards. Now, it’s in the hands of a mobile app user. There was conversation between server base solutions and cloud base solutions. It’s the difference between access and ownership. In the consumer world, the idea of the Sharing Economy has taken off, as individuals look for access over ownership, and independent entrepreneurs can monetize just about any asset they have, from a car with Uber, to an extra bedroom with Air BnB, or even their free time with Task Rabbit.  Many people argue that the sharing economy has less momentum in the B2B space, and that may be true.  But if we think about the transportation industry, we have been using load boards for decades.  A shipper with freight looking for an owner operator with an empty trailer? Why, that’s the sharing economy at its finest.  Today, however, we are seeing this concept creep into other areas of the supply chain.  With the development of technologies and new platforms, we are seeing companies share resources in warehouse space, computing capacity, and a number of other arenas.
  5. The rise of middle ware
    Here at Columbian Logistics Network, we like to say that for every pallet of product we move, we move an equal amount of information.  Supply chain visibility, reporting, and reliability have been dramatically improved over the last two decades through improved technology.  As stand-alone systems like ERP, WMS, and TMS systems have become more mature, it’s only natural that the integrations between those teams is now becoming more of a focus for technology companies.  First and foremost, we’re seeing a migration away from traditional Electronic Data Interchange (EDI) trading relationships and toward the use of Application Program Interface (API) technology to allow multiple stand-alone systems to “talk.”  That talking is becoming easier and easier through the use of external applications.  Jeff Berichon of Descartes touted his company’s “Bearware” suite to bring together shippers, truckload carriers, less than truckload carriers, parcel carriers, shippers, and customers for a pool distribution solution.  Warehouse space brokers Flexe have a mobile platform that integrates seamlessly between a shipper’s ERP or WMS and a 3PL or temporary warehousing provider’s internal systems.  Middleware applications like these could be catalysts to major transformational change in supply chain visibility, speed, and the value of big data.
  6. Where have all the good people gone?
    A major concern in the industry is where all the good people have gone. The pool of supply chain talent is not keeping up with demand. According to Deloitte’s third annual supply chain survey, only 38% of supply chain executives were confident their employees have the required competencies today. How can this be fixed? How can leaders in logistics find people who are ambitious enough to shoot for a C-Suite, but have hard skills that make them ready to hit the ground running?  One theme we are seeing across the country is partnerships between technology providers and universities.  The world’s leading ERP system, SAP, partners with over 2500 universities across the globe to provide students access and instruction in the commonly used system before those students ever hit the job market.  Even more niche platforms are getting in on the action- Cary, NC based MercuryGate International has a program called TMS for Universities that gives students real world software experience.  Even the number of students attending the CSCMP conference demonstrates the organizations’s commitment to closing “the talent gap,” but there’s plenty of work to do.

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