2015 Third-Party Logistics Study
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1 2015 Third-Party Logistics Study The State of Logistics Outsourcing Results and Findings of the 19 th Annual Study Twitter Feed: #3PLStudy
2 Contents About the Study Current State of the 3PL Market Special Topics - CRM and Mobile Technologies - Omni Channel - Strategic Workforce Management - Mexico Strategic Assessment 2
3 th Annual 3PL study Major research thrusts Customer Study Special Topics Facilitated Discussions Survey Major Industry Verticals Focus Interviews Key Industry Experts Capgemini Accelerated Solutions Environment (ASE) San Francisco Chicago New York London Paris Amsterdam Berlin Hong Kong Shanghai Singapore São Paulo Sydney Each year, workshops are held in different locations around the world 3
4 Recent 3PL Study themes This year s special topics: CRM and Mobile Technologies Omni Channel Strategic Workforce Management Mexico 4
5 Profiles of respondents represented 40% User 44% 3PL/4PL 16% Non-user 5
6 Contents About the Study Current State of the 3PL Market Special Topics - CRM and Mobile Technologies - Omni Channel - Strategic Workforce Management - Mexico Strategic Assessment 6
7 Outsourced logistics services Outsourced Logistics Services Percentages of 3PL Users Domestic transportation 80% International transportation 70 Warehousing 67 Customs brokerage 53 Freight forwarding 51 Reverse logistics (defective, repair, return) Freight bill auditing and payment Product labeling, packaging, assembly, kitting Cross-docking 30 Transportation management and planning 25 Outsourced Logistics Services Order management and fulfillment Percentages of 3PL Users 18% Inventory management 18 Supply chain consultancy services provided by 3PLs Information technology (IT) services Service parts logistics 14 Fleet management 13 LLP (Lead Logistics Provider) / 4PL services Customer service 5 Sustainability/green supply chain-related services
8 Benefits delivered by use of 3PL services Benefits 2015 Study Results Logistics Cost Reduction 9% Inventory Cost Reduction 5% Logistics Fixed Asset Reduction 15% Changed From 60% Order Fill Rate Changed To 66% Order Accuracy Changed From 61% Changed To 66% 8
9 What tools 3PLs need to be successful (top 6) Shippers 1. Transportation management (execution) 2. EDI 3. Transportation management (planning) 4. Warehouse/DC management 5. Visibility (order, shipment, inventory, etc.) 6. Web portals for booking, order tracking, inventory, etc. 1. EDI Providers 2. Transportation management (execution) 3. Customer order management 4. Transportation management (planning) 5. Visibility (order, shipment, inventory, etc.) 6. Web portals for booking, order tracking, inventory, etc. 9
10 The IT Gap 120% 100% 80% 60% 89% 85% 91% 90% 92% 92% 92% 88% 98% 94% 93% 94% 96% 60% 54% 54% 53% 55% IT Gap 40% 27% 33% 42% 40% 35% 42% 37% 42% 20% 0% Year IT Capabilities Necessary Element of 3PL Expertise Shippers Satisfied with 3PL IT Capabilities 10
11 Contents About the Study Current State of the 3PL Market Special Topics - CRM and Mobile Technologies - Omni Channel - Strategic Workforce Management - Mexico Strategic Assessment 11
12 3PL CRM solutions leverage mobile and cloud technologies 3PL Leveraging Mobile Technologies 3PLs provide more timely information better service to customers Solutions provide real-time visibility into the extended supply chain Mobile solutions help 3PL players with shipmentspecific services such as track and trace Integration with TMS and WMS solutions Customer Relationship Management Customers Leveraging Cloud - based solutions Cloud-based CRM solutions enable 3PLs to launch new services, target new industries, and address global supply chain issues Enhance information flow between 3PLs and customers to help reduce costs, improve operational capabilities, sourcing activities, etc. Provide end-to-end solutions for entire supply chain 12
13 Cloud- based CRM solutions lead to greater customer service and enhanced visibility for 3PL customers Inventory and Logistics Management Information Flow Customer Service Information Flow 3PLs and Cloud-Based Solutions Information Flow Warehousing Material Flow Transportation Source: Role of IT in 3rd Party Logistics providers :HRMars Role of cloudbased solutions 13
14 3PLs and CRM Solutions Example benefits Safety of Shipments 6 1 Increased Productivity Automated Information Updating 5 Individual Customer Service Benefits Systematic Way to Track Business Activity Measurability of Marketing and Sales Activity 70% SHIPPERS 77% PROVIDERS AGREED that CRM is essential to providing capable support to customers 14
15 Must-have CRM requirements AVAILABILITY of real-time tracking information relating to customer shipments EASY access to cost and shipment pricing information INCREASED ability of 3PL sales executives to respond to customer requests GREATER visibility of global operations MORE professional and productive sales calls and customer presentations by 3PL sales executives 15
16 What do 3PL sales executives do with their available time? 23% CUSTOMER-FACING PHONE MEETINGS/ CONVERSATIONS 22% CUSTOMER FACE-TO-FACE MEETINGS 55% SPEND THEIR TIME ON INTERNAL ISSUES Internal management meetings Responses to RFPs Preparation and data collection Inputting and updating data Pricing issues What if you had 20% more sales capacity through the CRM of your dreams? 10% Reduce costs & staff functions 24% Launch new services 24% Reduce costs and run a more lean organization 28% Expand into new geographies 14% Hire more account execs in the same geographies 16
17 Contents About the Study Current State of the 3PL Market Special Topics - CRM and Mobile Technologies - Omni Channel - Strategic Workforce Management - Mexico Strategic Assessment 17
18 Retail landscape is evolving rapidly and adjusting to changes in customer s demand as well as technological innovations Executive Summary Changing Retail Landscape Focus on consumer engagement Growing Middle Class demand Reduction in store size Venturing new markets Greater utilization of store space Shift to nontraditional formats Personalized products Shift to nontraditional formats Impact on Retailers Customer s Perspective Closed Loop Marketing Next Generation Sales Progressive Service Innovative Products Customer Centered Strategy Impact on Retailers Technology Perspective Electronic Price Tags Mobile Point of Sale RFID Digital Wallets Mobile Promotions Digital Promotions Personalized products Innovative Delivery Solutions Delivery Lockers Online Shopping With Local Store Pickup Sunday Delivery Delivery Drone Google Shopping Express Customers Delivering Packages Buy Online Pick Up In An Hour In-vehicle Pickup Warehouse Pickup 18
19 The survey data highlights the immaturity of omni-channel Supply Chains while most are focused on customer service 19
20 What is holding back Shippers from integrating Omni-channel fulfillment? 20
21 Contents About the Study Current State of the 3PL Market Special Topics - CRM and Mobile Technologies - Omni Channel - Strategic Workforce Management - Mexico Strategic Assessment 21
22 Did you know? 22
23 Which of the following will be the primary drivers of your organization s success in the next 5 years? 23
24 What capabilities does your organization value most in a functional or business leader? 24
25 Supply Chain Talent Industry Demands for New Supply Chain Talent The estimated demand for Supply Chain professionals to exceed supply in the ratio of 6:1 The average hiring growth rate expected to be higher than the average growth rate across other occupations Supply Chain Talent Gap 60mn people to exit the workforce by 2015 Only 40 mn people to fill up the gap More evident gap across middle and senior management level in the Transport and Logistics industry Supply Chain Talent Potential Shortage Shortage of new new talent due to the constant evolution of supply chain processes Demand for supply chain experts to grow exponentially with demand being greater than supply across all supply chain roles Supply Chain Professional Dynamics Only hard skills involved in operations management would not be sufficient in the future Optimum mix of both Soft and Hard skills involving leadership qualities and cross-functional competencies will shape the industry Due to dynamic nature of the industry, 3 out of 4 jobs in supply chain are expected to change by
26 Organizational Challenges to Workforce Management 26
27 Contents About the Study Current State of the 3PL Market Special Topics - CRM and Mobile Technologies - Omni Channel - Strategic Workforce Management - Mexico Strategic Assessment 27
28 An open economy backed by sound fundamentals and several alliances offer lucrative opportunities for doing business in Mexico 28
29 Moving operations to Mexico and Why 29
30 Security, Crime and Corruption is the most-concerning factor for those currently doing business or looking to do business in Mexico 30
31 Opportunities 31
32 Trends in Logistics Service Offerings in Mexico 32
33 Contents About the Study Current State of the 3PL Market Special Topics - CRM and Mobile Technologies - Omni Channel - Strategic Workforce Management - Mexico Strategic Assessment 33
34 Strategic assessment topics for 2015 Evolution of the 3PL Business Model: New Competition Supply Chain Risk Management The Intensifying Truck Driver Shortage Working Corporate Social Responsibility Into the Supply Chain 34
35 Questions? For further information: Pick up a copy of the study at one of the Media Boxes Check out our website at Thank You! 35
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