Shippers Rank Technology as a Key Differentiator Among 3PLs

2018 Third-Party Logistics Study respondents seek greater analysis

3PL technology at work

Inside today’s boardrooms, executives across all sectors view an effective supply chain as a key differentiator. Basic reporting of relevant data has become table stakes. According to the 2018 Annual Third-Party Logistics (3PL) Study, today’s shippers seek greater analysis to drive better supply chain decisions. And they trust 3PL providers to offer a wide range of information technology (IT) options that drive value.

Among study respondents, the majority of shippers – 70 percent – cited warehouse/distribution center management systems as the top IT systems or tools a 3PL must have to serve a customer successfully. Another 63 percent cited transportation management systems; 61percent cited visibility into orders, shipments and inventories; 59 percent cited transportation scheduling; and 59 percent cited electronic data interchange.

“In today’s environment, decisions on modifying the course of a shipment can be made at nearly any point in the supply chain,” the report said. “Due to real-time visibility into the supply chain, a product is no longer on a set course once it leaves the warehouse.

“Weather disruptions, traffic delays or even a shift in consumer demand can alter a product’s course to ensure it arrives when and where it is needed. Innovative solutions to capture and analyze data, as well as the ability to optimize the supply chain, are providing greater value and flexibility to shippers.”

Other technologies cited in the study include web portals, bar coding, network modeling and optimization, supply chain planning, transportation sourcing and global trade management tools. Shippers that took part in the study workshop also indicated interests in yard management, advanced analytics and data mining tools, cloud-based systems and distributed order management.

With greater transparency and data accessibility having an ever-increasing role in supply chain operations, Penske Logistics’ ClearChain® Technology Suite provides enhanced visibility, allowing users better insight into relative data that impacts their operations. Users are then able to consolidate the data and create a better decision-making process for their organization.

Achieve WMS-TMS Collaboration

Data-driven decision making helps increase asset utilization, improve efficiency and decrease supply chain volatility. Penske Logistics offers robust warehouse management systems (WMS) and transportation management systems (TMS) to gather, store and generate information.

The systems are two primary ways shippers and their 3PL providers can collect and analyze data. While each individual system contains powerful information, Penske takes it to the next level. Inside ClearChain, Penske’s Warehouse Manager and Transportation Manager apps communicate with each other, creating numerous ways to improve the flow of goods. This helps businesses maximize productivity, obtain even greater supply chain visibility and improve the movement of goods. Increasing communication and collaboration among all supply chain parties improves the ability to plan and execute shipments, because both parties can make better decisions when they have the right information.

With ClearChain, the WMS sends actual shipment information to the TMS to ensure precise shipment tracking. From an inbound standpoint, the WMS can receive information from the TMS so everyone knows what will arrive when. The granular level of detail in the TMS and WMS also helps to streamline warehouse operations. For example, the TMS can select the carrier and service level prior to processing a load. This allows the warehouse to either pick items directly into the pre-labeled shipping container or to get items to the appropriate warehouse location for shipping.

Enhance Supply Chain Visibility

Within the supply chain, each moving part must work both independently and in sync for the network to function properly. Shippers want reliable updates on the exact location of their products.

Through ClearChain, Penske Logistics takes customers’ data and puts it into an organized, easily accessible repository. This drives efficiency, cuts costs and improves the ability to manage a disruption. The sooner a customer knows about a potential disruption, the better. Timely updates create advanced planning and strategic decision making that can minimize further disruptions.

GPS tracking allows Penske to see where carriers are at any point in time. If a carrier doesn’t have an onboard tracking system, Penske can connect with the driver's cell phone, closing any potential “black holes” in the tracking process.

With ClearChain, Penske Logistics can supplement traditional data with external indicators, such as weather, to predict consumer behavior and identify potential supply chain disruptions. Drawing on data can help shippers predict when to ship or stage products ahead of a weather event or when to ship items based on demand.

Optimize Transportation Scheduling

With its holistic approach, Penske can view the entire supply chain network to schedule loads. Robust information allows shippers and 3PLs to make decisions earlier in the process, such as changing a truck’s path en route to avoid congestion, intercepting a load if a disruption occurs, or making decisions about preferential sourcing when it takes place, the study reported.

A holistic approach also allows 3PLs and shippers to find and schedule the most economical shipping method or avoid increased fees for rush deliveries.

Exchange Data in Real Time

ClearChain relies on the flow of information, and Penske draws on electronic data interchange to ensure seamless, timely information exchange. This real-time data helps link logistics operations directly with the shipper. The apps ensure all parties within the supply chain exchange precise data that allows shippers, transportation providers and customers to make necessary decisions.

Shipper Views of Needed IT-Based Capabilities by 3PLs*

This table summarizes shipper responses to the question, "which information technologies, systems or tools must a 3PL have to successfully serve a customer in your industry classification?”

Information Technology Percentage Reported by Shippers
Warehouse/distribution center management 70%
Transportation management (Planning) 63%
Visibility (Order, shipment, inventory, etc.) 61%
Transportation management (Scheduling) 59%
EDI data interchange (Orders, advanced shipment notices, updates, invoicing) 59%
Web portals for booking, order tracking, inventory management and billing 47%
Bar coding 41%
Network modeling and optimization 39%
Supply chain planning 39%
Transportation sourcing 38%
Global trade management tools (e.g., Customs processing and document mgmt.) 35%
CRM (Customer Relationship Management) 31%
Customer order management 28%
Yard management 27%
Advanced analytics and data mining tools 27%
Cloud-based systems 25%
Distributed order management 18%
RFID 16%

*Source: 2018 Annual Third-Party Logistics Study

About the 2018 Annual Third-Party Logistics (3PL) Study

The Third-Party Logistics Study examines the global outsourced marketplace and leading trends for shippers and 3PLs in the logistics industry. This year’s study was sponsored by Penske Logistics, Infosys Consulting, Penn State University and Korn/Ferry. For more information, visit www.3PLStudy.com.