The term “supply chain” has become outdated. It indicates a linear sequence of events, when the reality is that supply chains have evolved.
Supply Network vs. Supply Chain
And today's supply chains resemble an enormous spider web - a network of parties scattered across the globe working together. That’s why shippers are increasingly turning to their logistics partners to provide them with the real-time visibility they need to make information flow, not linearly but via a network.
That’s good news for 3PL providers and freight forwarders… unless they still rely on outdated linear processes and systems. Fortunately, you’ll discover how to bring order to the chaos by reading the Gravity white paper “How to Close the 3rd Party Logistics Technology Gap”.
The Linear Supply Chain is Broken
The traditional way for communicating up and down the supply chain reminds me of that old childhood party game “Pass the Parcel” (you may remember it as “Telephone”).
The first person in the chain passes a message to the person next to them, who passes it onto the next person, and so on. The last person in the chain eventually receives a garbled version of the original message.
The problem with this linear approach is that each person has only a sequential view of what’s happening before them and after them, and when information needs to flow linearly from one part to another each person is a potential bottleneck in the chain.
That may get laughs at a party, but it’s not ideal for managing today’s complex supply chains that need to keep up with the velocity of business in our 24/7 digital world.
So the question becomes, how to better manage the complexity of modern global trade - large systems of trading partners, outsourcing - and overcoming the inherent lack of control and oversight? The key is to increase visibility, everywhere in the supply network so that businesses can be proactive and take control of their own future. That’s where the 3PL comes to the rescue!
3PLs and Freight Forwarders are Evolving
Analyst firm Gartner in its 2018 Third Party Logistics Providers Magic Quadrant reported that 3PLs are extending beyond traditional transactional services by providing shippers with real-time visibility over their entire supply chains. Not only do they become more valuable to their customers, they create a significant competitive advantage for themselves.
Gaining a Competitive Advantage
Logistics providers that provide transactional services talk to their customers about shipments and containers. But what if you knew more about your customers’ business? That’s possible when you provide them with complete visibility of their end to end supply chains. You’ll begin to talk to them in their language at product level and help them to optimize their entire logistics operations!
For example, picture this scenario. A new clothing range is launching that consists of trousers, jackets and a blouse. You learn that the production of the blouses is running late, so you make the quick decision at the consolidation point to ship the key stock of the late SKUs via air freight, while the balance of products continue to their destinations via the original mode.
You are responsible for avoiding disruptions and keep costs down by only using air freight for the delayed products. As a result, your value becomes more than just moving freight. You’ve helped your customer figure out the best, most cost efficient way to launch the entire range on time.
That scenario can become reality by leveraging technologies including cloud computing-based platforms, powerful mobile devices and apps, and Big Data analytics solutions. Even better, all of those are available and easily accessible to medium-sized 3PLs and freight forwarders that do not have the IT budgets or staffs of a Top 50 Logistics Provider. That’s critical, because shippers now expect their 3PLs to take the lead in breaking down the silos that comprise today’s complex global supply chains. Being able to meet those expectations gives you a significant competitive advantage.
Achieving Real-Time Visibility
So what do you need to achieve a true networked approach? One word: visibility. There are two primary avenues for achieving that visibility: use cloud-based services to build and manage your own 3PL software solutions, or partner with an outside vendor.
Answering this “Build vs. Buy” question is critical, and there’s no universal answer. It depends on how quickly you want to start delivering visibility as well as the resources you have in place, both in terms of manpower and IT systems. Our white paper examines the advantages and challenges both options present, and will help you evaluate your current capabilities and needs.