What Makes a Winning 3PL Relationship?

WEBCAST: Wednesday, July 14, 2010 at 2:00 PM EDT

Our panel of experts will provide the answers in this timely online Webcast. Drawing on the results of their 14th Annual Third Party Logistics survey, they will explain:

• How to structure the 3PL relationship for continuing success.
• The key components that must be in place for a successful relationship between the customer and provider, transportation, and manufacturing.
• How to set performance metrics that lead to desired outcomes.
• The role that technology can play in enhancing your 3PL relationship.

As for ways of dealing with vast fluctuation in demand, Leathers said it is imperative for shippers and logistics and transportation service providers you cover their forecasts with some degree of scenario planning, rather than run the risk of getting caught in a pinch, which Leathers said is occurring in the marketplace. 

In order to better manage demand, Leathers said leveraging technology to optimize transportation networks on a load-by-load basis is highly important.

This was echoed by Dick Kane, president and CEO of 3PL provider Kane Is Able.

“Technology is the key to all our businesses and if you take a 3PL perspective our job is to reduce supply chain costs and add value for shippers,” said Kane. “And as we know it is a small margin business so driving the efficiencies that need to be driven to reduce costs—with 50 pct of costs being labor—so whatever we can do to reduce labor costs is helpful.”

Kane said that as the 3PL industry has gotten more sophisticated, more players have been looking to technology as a competitive advantage. Many shippers, he said, are not investing into supply chain technology, as they feel that is part of the services 3PLs should and need to be providing for shippers.

Another issue receiving a fair amount of interest is balancing demand with supply as inventories ramp up, said Nari Viswanathan, vice president of supply chain research, at Boston-based Aberdeen Group.

“There was a situation before where companies cut down their inventories to a very, very low level and now that they are seeing increases in demand,” he said. “And supply chains have become so long, they cannot just increase their inventory and capacity and they are scrambling to find the transportation capacity to meet their demand.”