Archive for Third Party Logistics

3PL Executive Insights from MercuryGate User Conference 2013

What is the path to building successful and lasting 3PL-customer relationships? That was the main theme of a panel session I led at last month’s MercuryGate User Conference 2013, which included the following 3PL executives: Shelli Austin, VP at Integrated Distribution Services (IDS) Michael Bartz, CIO at ReTrans Jane Sandifeer, VP Business Solutions at Advanced Shipping Technologies Brad Stewart, President at Rockfarm Supply Chain Solutions The panelists talked about the importance of trust and transparency, […]

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4 Important Factors to Consider When Evaluating 3PL Partners

I often get emails from logistics executives looking for help and advice on selecting a 3PL partner. A couple of weeks ago, for example, I received an email from someone asking if I had updated a framework I had developed several years ago to help companies evaluate 3PLs. The answer was no, but this person’s email got the wheels in my head turning: What are the most important factors to consider when evaluating and selecting […]

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3PLs and Software Vendors: Keep Innovating Your Business Models

Most of the time, when people talk about innovation in supply chain management and logistics, the focus is on technology (e.g., social and mobile) or business processes (e.g., same-day delivery and omni-channel fulfillment). But what about innovation in business models? Is there an opportunity for 3PLs and software vendors, for example, to innovate their business models to deliver greater value to clients, differentiate themselves from the competition and gain market share, and achieve greater financial […]

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Guest Commentary: What’s the Biggest Challenge for Logistics Service Providers?

Ok, there is not just one challenge that logistics service providers face, or one that stands out among the rest either. Logistics service providers (LSPs) face the same challenges that have been on their plate for a number of years now. Therefore, I see the main challenge as “laundry list” management, at least for the foreseeable future. For big monolithic challenges, you have to look out one or two decades, at things like urbanization, smart […]

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If Operational Excellence is a Given, Then What Else Matters for 3PLs?

If operational excellence is not enough for third party logistics providers (3PLs) to differentiate themselves in the market, then what else matters? I’ve been thinking about this question a lot lately, as I prepare to participate in two 3PL-related sessions this month: “Delivering Customer Value Beyond Operational Excellence,” a panel discussion I am moderating with leading logistics service providers at the MercuryGate User Conference on September 10th. “The Path to Becoming a Successful 3PL,” a […]

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Rating 3PLs on their IT Capabilities

My colleague Clint Reiser and I recently interviewed twelve logisticians at manufacturing, retail, and distribution companies ranging in size from very large to very small. Our focus was on four key dimensions that should logically correlate with how well a Third Party Logistics (3PL) provider is able to perform. Those dimensions include a 3PL’s IT capabilities, their ability to execute, their ability to drive continuous improvement, and their ability to bring innovative solutions to the […]

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Guest Commentary: Change Agent: A Challenging Role for Freight Management

Much has been written about change management, and the basics of smoothing the way for new ideas and processes are fairly well known. But managing large-scale change in freight transportation deserves its own chapter in the manual. While the general principles of change management apply to transportation projects, there are nuances that managers need to take into account if they are to avoid costly mistakes. And there is ample room for error. As we explained […]

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Guest Commentary: Solving Logistics Service Provider Business Problems with Cloud Computing

The overall business model for most logistics service providers (LSPs) is not that complex. The LSP provides services to their clients that, in turn, generate revenue for the LSP. A key challenge for most LSPs is that the difference between the revenue and expense (their margin) is so small, it must be relentlessly scrutinized. Additionally, given that many customers view LSP services as a commodity, LSPs are constantly challenged to differentiate their offerings against the […]

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Guest Commentary: Finding the Next Level of Value for 3PL Customers

Traditionally, most third party logistics companies have focused on creating value for customers by taking over their transportation and warehousing operations, and through economies of scale, systems and best practices, removing excessive costs from these functions. While this ability to help customers reduce these supply chain costs remains important, the outsourcing cycle for warehousing and transportation management has matured for many companies. Efficiencies have been gained. Easily identifiable costs have been wrung out. Where will […]

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Winner of Nobel Prize in Economics On Outsourcing and Supply Chain

Oliver Williamson, a Professor Emeritus at the University of California Berkley and co-recipient of the 2009 Nobel Prize in Economics, published a paper in April 2008 titled “Outsourcing: Transaction Cost Management and Supply Chain Management” in the Journal of Supply Chain Management. Williamson’s area of expertise is transaction cost economics. The paper is far more focused on theory than practice, and is not an easy read by any means. However, there are a few nuggets of […]

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