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The State of Logistics Outsourcing

by Mary Rooney | Dec 04, 2018

The 2019 23rd Annual Third-Party Logistics Study focuses on how companies must stay nimble and agile to keep up with rapidly evolving conditions and an increasing level of complexity within the supply chain. This is particularly relevant as retailers and manufacturers work to keep inventories low, respond to faster shipping demands and react to changes in demand patterns within the global economy.

We captured some highlights of the study below and the full report can be accessed here.

Supply Chain Workforce
The changing dynamics of the global supply chain, low rates of unemployment throughout the United States and new technology has impacted the supply chain industry from the warehouse floor to the cab of the truck to the C-suite. While each subsector of the supply chain workforce has its own challenges, one thing is certain: To be successful, companies need to create alternatives to their traditional ways of hiring, staffing, promoting and recruiting executives as well as hourly workers.

Workforce issues are among the top concerns of those taking part in The Annual Third-Party Logistics Study. Respondents reported that the top five workforce issues currently facing their organization are attracting talent (59 percent), developing leaders (48 percent), retaining high performers (40 percent), enhancing employee motivation and engagement (38 percent) and enhancing workforce performance (37 percent).

Revisiting the Last Mile & Introducing the Last Yard
The term “last mile” is in common use today in the fields of logistics and supply chain management. The length of the last mile may range from a few blocks to much longer distances, but it typically represents the last segment of a supply chain or order-fulfillment process.

Although this concept has been relevant for many years, it has taken on enhanced significance in today’s world of e-commerce and omni-channel distribution. Operationally, this can be the most expensive and most important part of the supply chain process, particularly to those logistics and transportation providers that are most involved in seeing that shippers’ delivery requirements are met.

The “last yard” concept refers to what happens to a shipment once it is delivered to a customer or consumer, and then how it is routed to a specific location where it may be needed or used. The capable execution of last yard responsibilities will determine whether the customer’s needs are fully satisfied or not. Ironically, failure in the last yard may negate the value created by parcel, truck or 3PL providers that deliver shipments on time and complete as per customer requirements.

This means that the last mile doesn’t necessarily end when needed products are delivered to a customer or a receiving location. While it would be logical to think of the last yard as a distinct step beyond the last mile in an overall supply chain or fulfillment process, there are situations where the term last mile might be interpreted to include last-yard responsibilities.

Omni-Channel
Retailers are working to meet more demanding customer expectations, such as same-hour, same day or next-day delivery, and shippers and 3PLs are offering an increased number of innovative delivery options.

Brick-and-mortar stores remain a crucial component of the global shopping experience, but their role is changing in the omni-channel business model to act as ‘fulfillment centers’ serving as pick-up locations for online orders and fulfilling local deliveries.

Artificial Intelligence in the Supply Chain
Customers are demanding better and faster performance, and higher levels of efficiency will be needed for the supply chain to deliver the value, quality and speed customers and shippers expect. Intelligent automation and artificial intelligence is poised to create more dynamic, flexible and interconnected supply chains. In addition, creating a network of networks creates a single view of demand while also improving the integrity transactions, which is taking on greater importance with the introduction of blockchain.

The vast amounts of data and information made visible through increased connectivity can enable shippers to obtain deeper insights into their supply chains, reduce costs and improve agility. Automation, analytics and AI are key disruptors transforming global supply chain functions, and utilizing multiple avenues of automation will drive maximum benefits.

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