Ecommerce and omnichannel have had a dramatic impact on consumer expectations and, consequently, the complexity of logistics operations. Effective supply chain management is more critical today than ever before.
We recently sat down with Donna Slyster, chief information officer at Saddle Creek, to talk about how 3PLs are leveraging technology to help their customers adapt to this shifting environment.
How are 3PLs using technology and analytics to help their customers respond to rapid changes in the supply chain?
Companies are increasingly looking to their 3PL for logistics technology and analytics that can help them to be more sophisticated about how they anticipate and adapt to changing supply chain dynamics. The use of technology helps 3PL partners predict, or at least recognize, when exceptional events occur. Real-time dashboards show progress to plan and determine where interventions may be needed in order to meet or exceed customer expectations. Technology-assisted packaging and shipping ensure that the right product goes to the right customer on the right delivery platform within the desired delivery window at the most efficient cost. To prevent late deliveries, real-time truck-routing analytics identify the fastest, most cost-effective routes.
What is driving companies to look to their 3PL for logistics technology?
Experienced 3PLs can leverage solutions across many customers and apply best practices while still offering customers the specialized or custom elements that their business needs. Due to our scale, we can provide capabilities that companies may not want to invest in on their own. Gartner even recommends that shippers have their 3PL use and leverage their tools.
What types of technology are 3PLs using to drive better decisions in optimizing the supply chain?
Three critical technologies for us are Distributed Order Management, network evaluation, and transportation optimization tools. They enable us to improve visibility, optimize inventory across multiple fulfillment sources, efficiently manage backorders and returns/exchanges, offer a variety of shipping options, ensure cost effectiveness, and provide seamless service.
How do you use analytics and data to drive decisions?
We do use analytics and offer them to customers based on their needs. Resource planning, space planning, physical-location planning, and transportation optimization are just a few of the more straightforward uses. Of course, we also apply them to strategic decisions. The biggest challenge is the sheer volume of data that supply chains create. We try to focus our attention on those areas that we deem most important to our customers and our business.
How does an investment in technology and/or analytics set a 3PL apart?
We consider technology to be a competitive advantage. It enables us to help our customers succeed in the marketplace. For example, we can help reduce their inventory volume, assist in positioning inventory to the optimal location, provide expediting, and leverage transportation costs across customers.
Where does room for improvement still exist?
We continually collaborate with our partners – customers, associates and technology partners. In doing so, we find opportunities to optimize performance. Given the changing supply chain, that will always be the case. We work with our vendor partners in a variety of areas such as increasing mobility collaboration with our drivers, enhancing dashboards for our customers, expanding electronic collaboration between supply chain partners, etc.
I envision the level of business intelligence will evolve, so there are much more timely, predictive, actionable insights across the supply chain. Today’s tools are challenged to handle the anticipated impact of diverse external interventions and changes occurring in the global supply chain. IBM has announced they intend to educate their Watson platform to do this, but it will take years for Watson to be taught and develop the necessary correlations.
Is there a gap in what shippers and the 3PL find valuable with regard to IT investment?
We are both looking to get the greatest systems value at the best cost. Shippers have to think beyond the supply chain, so they might be inclined to select solutions that are highly integrated with the rest of their business to minimize their total operating cost instead of choosing the best in case for each business function.
For 3PLs, warehousing, fulfillment, and transportation are our specialty. We look for the best tools to drive optimal performance for our customers while providing top-notch integration with their systems.
We also look for software that can be used in a multi-tenancy environment, as we support more than one customer in a warehouse. That way, we can leverage labor and other expenses beyond systems costs across customers. 3PLs also need tools to support our customers’ varied billing preferences.
What does the future look like for 3PLs?
Our space will continue to be a very competitive one. Our customers’ expectations will grow just as their customers’ expectations do. We need to thrive on change, leverage collaboration and be predictive of what may happen in the supply chain. I feel the future is bright for those of us who focus on delivering greater value that ties directly to our customers’ success.
Saddle Creek’s Donna Slyster and other industry executives discuss 3PLs’ expanding role in logistics technology in the June issue of Supply & Demand Chain Executive. Read the article.