It has long been acknowledged that IT has a vital role to play in achieving operational efficiencies in the supply chain.
The 2017 Third-Party Logistics Study from Cap Gemini Consulting looks in detail at the state of logistics outsourcing on a global scale and once again recognises this as it reports that 3PLs’ IT capabilities are very important to shippers. Indeed, the percentage of shippers indicating that IT capabilities are a necessary element of 3PL expertise stood at 91% in 2016.
It is clear that there is significant demand among shippers for their 3PL partners to offer capable IT technologies as a key part of their solution. More importantly, competencies in this area are fast becoming differentiating factors when shippers are making selection decisions.
The warehousing function continues to play a critical role in the supply chain as it acts as the interface in linking material flows between the supplier and the customer, and indeed the shipper and 3PL.
Supply chains are becoming shorter and more integrated and the need to handle omni-channel operations is of growing importance, particularly in retail environments.
According to the study warehousing is one of the most frequently outsourced activities with 66% of shippers doing so. The shippers’ views of other IT-based capabilities that 3PLs should provide include EDI (68%) and stock visibility (66%), both vital attributes of warehouse management.
The warehouse has also been recognised as one of the operational areas where tailored services provided by 3PL companies can help their customers gain competitive advantage. And never has this been as important in such a competitive environment as logistics outsourcing, where even the slightest competitive advantage can pay dividends.
So it follows that the Warehouse Management System (WMS) has a critical impact on the supply chain and is central to a 3PL company’s ability to innovate and create value for their customers.
Overall, the 3PL sector is increasing globally, and alongside this growth comes increasing competition which requires 3PL providers to refine and expand their core competencies. An effective WMS that can successfully manage the changing demands of the supply chain will continue to play a vital role in keeping 3PLs competitive.