The term “supply chain” has become outdated; it indicates a linear sequence of events, when, in fact, the reality is that supply chains have evolved.
Supply Network vs. Supply Chain
Today's supply chains resemble an enormous spider web, with 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That’s good news for 3PL providers and freight forwarders unless of course, they still rely on outdated linear processes and systems. Fortunately, you can discover how to bring order to the chaos by reading the Gravity white paper “How to Close the 3rd Party Logistics Technology Gap”.
The Evolution Of The Supply Chain
Traditionally, communication throughout the supply chain relied on a chain of sequential, random and offline links working linearly. Each of the links within the chain had unique attributes that would operate on an individual basis within the chain, this resulted in them being reactive rather than proactive, and so, therefore, they were often not trusted.
The most significant issue with a linear approach is that each player within the chain only has a sequential view of what is happening directly before and after them; as such, when it is necessary for information to flow linearly through the chain, bottlenecks could occur generating confusion and delays are subsequently created.
This approach doesn’t work in today’s world where multiple suppliers and distribution channels are working in an aligned fashion. Business dynamics now comprise fluid relationships, interchangeable suppliers, and customers offering a variety of partnerships. Complex supply chains need to keep up with the velocity of business and the always-on, 24/7 digital world of visibility that creates certainty, traceability and auditable trails as a set of connected, and collaborative processes.
3PLs And Freight Forwarders Are Evolving
Analyst firm Gartner in its 2018 Third Party Logistics Providers Magic Quadrant paper, 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, but they also 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!
To give an example, consider the following scenario: A new clothing range is being launched, consisting of trousers, jackets and a blouse. You learn that blouse production is running behind schedule, so you make a quick decision at the consolidation point, to ship the late SKUs key stock via air freight, while the balance of product continues to the destination via the original mode.
You are responsible for avoiding disruptions, and to 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 a reality by leveraging technologies including cloud computing based platforms, powerful mobile devices and apps, and big data analytics solutions. What’s even better, is that all of those are available, and easily accessible to medium-sized 3PLs, and freight forwarders that do not have the IT budgets or staff 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 do to achieve a collaborative partner network? One word: visibility. There are two primary avenues for gaining that visibility: use cloud based services to build and manage your 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 concerning labor resources, and also IT systems.
Our white paper examines the advantages and challenges both options present and will help you evaluate your current capabilities and needs.