Your 3PL and Technology: Why IT is Essential
A Shifting Landscape
Since the dawn of time, we’ve had a need to move this from here to there. From horse and buggy to drone, logistics has carried this trend forward. In the past, shipments left their origin and arrived at the destination, and the only expectations of the involved parties were that the shipment arrived on time and in good condition. The last two decades, however, have witnessed revolutionary changes when it comes to the expectations of logistics customers. The “always on, always connected” mentality that technology has created in our personal lives impacts logistics as your customers want the same level of communication and access when it comes to shipping. Marty Wadle, senior vice president of supply chain solutions for Ruan said, “Twenty years ago, shippers just wanted us to move their freight. Now they want to know what's going on with their freight, and how we can move it more efficiently and economically the next time.” Logistics evolved from basic transportation — “get this from point A to point B”— to a complex, multi-faceted undertaking. As new technologies emerge the space continues to get more competitive and more efficient. However, according to one source, “Shippers are in the Dark Ages, technology-wise, compared with brokers and carriers.” Shippers expect 3PLs to provide their technology needs.
Your 3PL, though, like many others, may still be doubting the ROI of making technology a priority. To be sustainably effective in the ever-changing logistics industry, this mindset must change. Adrian Gonzalez, founder and president of the consulting firm Adelante SCM, states, “What’s becoming clear is that technology, including access to IT resources and advice, are contributing more to the overall value proposition these days.” Technology is more critical to your business than ever before.
Why IT is Important to Your 3PL
Technology matters to your 3PL in an obvious way: Your customers expect IT expertise from their 3PL partners. “Meeting a shipper’s capacity and service level requirements at a competitive cost is no longer enough,” says Gonzalez. “Logistics service providers also need to meet the information requirements of shippers — that is, provide them with timely, accurate, and complete data and insights.” With this shift in mind, it is critical that you display that expertise and deliver on clients’ expectations.
However, simply meeting customer expectations only puts you on par with your competition. Technology can play a much more integral role because how it is leveraged can move the perception of the services you provide from a commodity to a strategic tool. The centerpiece of the functionality that your customers are looking for from their partners is transparency and visibility into the lifecycle of their shipment in real time. The longer it takes for your customers to get updates or visibility into the business they are doing with you, the wider the opening for competitors.
Technology investment was the foremost concern in a 2016 study performed by Inbound Logistics when 3PLs were asked about the greatest challenge they face. In his article, “3PL Perspectives 2016,” Jason McDowell writes, “As cloud networks and the Internet of Things connect each step in the supply chain, it becomes easier for providers to host and lend Software-as-a-Service technology to their clients.” Suppliers often rely on their 3PL partners for their significant technology capabilities. Naturally then, the technological capability of your 3PL plays a major role in whether or not you win business.
Alongside the known competitive factors that you face, 3PLs are on the precipice of various disruptive factors. Chief among these potentially disruptive forces are technology startups looking to “Uber-ize” transportation, making the margins of the industry even slimmer. According to Kristy Knichel, president of a 3PL in Gibsonia, PA, “Those 3PLs that provide little value to shippers, outside of providing a rate, will see themselves replaced by tech startups that will be able to do the same thing… [except] more efficiently, provide more visibility to the shipper, and ultimately drive down costs through gained efficiencies.” What those services that compete on razor thin margins can’t provide your customers is an immersive experience and the institutional knowledge that your firm possesses. But for this priceless knowledge to provide actual value, it must be liberated from antiquated systems where data and knowledge are in self-contained silos, and made freely available to the customer when they need it. Investing in the right technology now to facilitate transparency with your customers will pay dividends for the future of your business.
Why Outsourcing May be the Answer to Your IT
With the right organization, you can transform your use of technology into a competitive advantage. By leveraging consulting services, you accelerate your ability to bring value to your customers by bringing knowledgeable experts into the fold. Experienced IT consultants can help with network modeling and optimization; Web portals; and other technological aspects of your business to ensure you’re operating with the efficiency and effectiveness that your industry requires. Furthermore, working with a consulting firm to meet your technology needs allows you to focus on the revenue drivers of your 3PL. By enlisting the help of a trusted IT provider, you don’t have to build an in-house IT department or take on the burden of salaries and benefits.
Our director of project management, Dustin Werden, says, “At the core, Afidence is passionate about the business of driving outcomes for our customers; technology just happens to the vehicle for us to deliver those outcomes. Our project management consultants understand technology doesn’t operate in a vacuum. We leverage the deep business acumen that each of our consultants possess to ensure the technology end-state of a project aligns with the desired business outcomes of the organization’s leadership.”
Obtaining new technology and utilizing it is no longer enough. The true advancement comes from leveraging it to deliver efficient solutions on-time and under budget. This is where project management can play a pivotal part in your business. A consulting and business advocate like Afidence pulls from a deep well of expertise spanning multiple methodologies and substantial experience delivering quality service in a variety of industries. Afidence understands that each environment, business sector, and organization is different, so we tailor our services to have maximum impact on your business. Our project management team can assess your particular needs with your strategic vision in mind and help provide solutions that lead to success.
In addition to these advantages, outsourcing also leads to more time for you to innovate and perfect your business model. This support allows you to fast forward to the “R” of the ROI for your technology investment. It also leads to better customer service, which has increased in importance for shippers. Transparency and communication are foundational to great service. Shippers want to provide great customer service to buyers, so they need exceptional communication from your 3PL to elevate their customer service.
At Afidence, the syncMETHODOLOGY™ guides every interaction. We utilize proactive, consistent, and concise communication to ensure mutual understanding and success. Trust is a core tenant of our business because we know it leads to great relationships and excellent customer service.
In an industry that gets more competitive by the minute, the smallest of advantages can make a difference. Email firstname.lastname@example.org or connect with Afidence on social media today to start the conversation or schedule a free consultation.
Bryan Hogan is the CEO & co-owner of Afidence. Bryan’s experience spans over 30 years in the IT industry and is seeded with a deep sense of integrity, strong business acumen and industry leadership.
Afidence is a technology consulting and services firm launched in 2010 with a goal to earn trusted relationships by surrounding their clients with clear, transparent and honest solutions unmatched in the IT Industry. Afidence serves over 80 active clients in the Cincinnati-Dayton region, extending into 30 states and 15 countries. Headquartered in Mason, Ohio, Afidence also maintains support offices in Miamisburg, Ohio. To learn more about Afidence, please visit our website.
Burnson, Patrick. (2016). Top 50 U.S. and Global 3PLs 2016: Technology Now the Key Differentiator. Logistics Management. Retrieved from http://www.logisticsmgmt.com/article/state_of_the_3pl_market_technology_now_the_key_differentiator
Douglas, M. (2016). 3PLs & Carriers: At Your Service. Inbound logistics. Retrieved from http://www.inboundlogistics.com/cms/article/3pls-carriers-at-your-service/
Knichel, K. (2016). Key Trends Shaping the Third-Party Logistics Industry. The Huffington Post. Retrieved from http://www.huffingtonpost.com/young-entrepreneur-council/key-trends-shaping-the-th_b_8774778.html
McDowell, J. (2016). 3PL Perspectives 2016. Inbound logistics. Retrieved from http://www.inboundlogistics.com/cms/article/3pl-perspectives-2016/