Capgemini Consulting Unveils 17th Annual 3PL Study

Global study reveals shippers are placing growing importance on third party logistics providers as a key source of supply chain innovation and risk mitigation


Almost half of 3PL’s (44 percent) say they are placing a greater focus on supply chain risk and mitigation than five years ago. Top strategies that 3PL’s are currently using to mitigate supply chain risk include closer partnerships (69 percent); improved business continuity planning (61 percent); advanced supply chain visibility tools (65 percent); and better employee training (64 percent).

Yet, despite the increased risk of supply chain disruption, many companies are currently underfunding supply chain disruption mitigation planning. And without more advanced strategies in place—such as supply chain mapping and enterprise risk management—the strategies currently in use will not be as effective at minimizing the risk of supply chain disruption. Those shippers that have successfully implemented an effective strategy here highlight a detailed assessment of the state of the network together with a thorough plan to alleviate the biggest sources of vulnerability and outline the response for when disruptions do occur as the best way to create a solid supply chain risk mitigation strategy.

“Increased competition and pricing pressures are driving shippers to seek lower labor and manufacturing costs from further afield; centralized distribution has focused more production and inventory in fewer places; product lifecycles are growing shorter in some segments; and, at the same time, companies are reacting to the challenging economic environment by reducing inventories—all of which is leading to ever more complex global supply chains and, in turn, magnifying the negative impact of supply chain disruption,” said Sven Hoemmken, Global Head of Marketing and Sales, Panalpina. “A sound mitigation strategy is vital for reducing costs and creating a competitive advantage. Developing a resilient supply chain that balances risk with new growth opportunities starts with a rigorous assessment of the current supply chain followed by a considered plan to mitigate against the biggest areas of vulnerability.”

The report also highlights how much value some shippers are driving from their 3PL providers. Shippers report spending an average 12 percent of revenues on logistics, with an average 39 percent of that spent on outsourced logistics services, and both shippers (86 percent) and 3PL’s (94 percent) largely view their relationships as successful. Just over half (56 percent) of shippers even say their use of 3PL provider has directly led to year-on-year incremental benefits. They also report significant savings from logistics cost reductions (15 percent), inventory cost reductions (eight percent) and logistics fixed asset reductions (26 percent).

For a copy of the full study, visit http://bit.ly/QB7YZF.

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