ARC to Debut Benchmarking Model for Logistics Service Providers

Aims to help manufacturers and retailers evaluate 3PLs; report due for release April 22

Aims to help manufacturers and retailers evaluate 3PLs; report due for release April 22

Dedham, MA  April 14, 2005  Technology consultancy ARC Advisory Group has developed a benchmarking model for third-party logistics service providers (3PLs), designed to help manufacturers and retailers evaluate providers and to give 3PLs the ability to evaluate their performance against the competition.

In a market study to be published April 22, ARC details its Logistics Service Provider (3PL) Maturity Model, which defines different levels of maturity across a variety of attributes, including technology, industry focus and diversification, and brand management.

According to Adrian Gonzalez, director of ARC's Logistics Executive Council and author of the upcoming study: "The primary objective and challenge of most logistics service providers today is to grow profitably in an evermore global, competitive and demanding business environment. The Maturity Model serves as a framework for strategy development and as a guide for continuous improvement."

Key Questions

ARC said it initiated this study, titled "Strategic Guide for Logistics Service Providers (3PLs): Industry Trends, Provider Profiles, and Maturity Model," at the request of its clients  including manufacturers, retailers, software vendors and logistics service providers  which are interested in obtaining answers to the following questions related to the logistics service provider industry (also known as third-party logistics):

  • What are the key trends and issues facing the industry, and how are service providers responding?

  • What is the role of technology, and how is the landscape changing? Which software vendors are best positioned to service this industry?

  • What differentiates one service provider from another? Who are the industry leaders by vertical industry, type of service or geographic region?

  • How can a 3PL benchmark itself against the competition? What are the key attributes clients must consider when assessing service providers?
"This study is a cost-effective way for anyone interested in the logistics service provider (LSP) market to access and leverage the wealth of intellectual property we've collected the past few years via various consulting and research projects," said Gonzalez. "It fills in the gaps left unaddressed by other reports, such as providing an in-depth analysis of IT trends and software vendors relative to the LSP industry."

Role of Technology

Logistics service providers must take a holistic and integrated view of their information technology (IT) requirements and infrastructure, especially as their scale and scope continue to expand, ARC advised. In other words, the consultancy said, LSPs must think beyond transportation and warehouse management when developing their IT strategy; they must also consider solutions that address financials and human resource management, customer relationship management, global trade management and value added services.

The study highlights these different solution types and key technology trends such as the emergence of "on demand" solutions and service based architectures. It also profiles 14 enterprise and best-of-breed software vendors that currently serve LSP customers or are likely to focus on this market in the near future.

In addition, the study includes quantitative profiles of 20 service providers that are generally recognized as market leaders or innovative by clients, the media, and analysts. Collectively, these 20 service providers accounted for over $52 billion in gross revenues in 2004. ARC said that the list of providers is by no means comprehensive; it's simply a representation of the overall market. Each provider profile contains revenue breakdowns by geography, sector, vertical industry and service.

Additional Articles of Interest

For more information on the latest trends in the logistics space, see the article "The Analyst Corner: Fulfillment & Logistics" in the October/November 2004 issue of Supply & Demand Chain Executive.