Executive Briefings

Factors Enabling Future Logistics Growth

A host of marketplace trends are driving logistics companies to offer more value-added services and to physically locate closer to customers in order to support continued growth, says John Ferguson, CEO of SCI Logistics, a major logistics provider in Canada.

Factors Enabling Future Logistics Growth

Marketplace trends impacting third-party logistics growth include a growing demand for services that go beyond traditional logistics, more and cheaper automation of processes and more complex deliveries that include services like equipment setup and installation, says Ferguson. The biggest market driver, however, at least in Canada where SCI is a prominent player, is the double-digit growth of ecommerce, he says. "We are seeing tremendous opportunities emerging there."

One impact these trends are having on 3PLs is a change in the services that companies are outsourcing, Ferguson says. "We are seeing a propensity among customers to insource some of the more traditional logistics functions and to outsource things like technology and more complex services."

Customers traditionally have asked SCI to provide technology to support their logistics processes, says Ferguson. "But today, especially in ecommerce, there is more emphasis on the consumer experience and we consequently are seeing a lot more interest in externalizing our data and making it compatible with handheld technology, such as smart phones and iPads. Our technology is more and more extending beyond the four walls to help make that consumer experience better.

"Our customers may not previously have thought of us as a data source, but we control certain data that they can use to make better decisions in areas like demand forecasting, delivery networks and, again, the consumer experience," Ferguson says. "I think there is a real opportunity for 3PLs to use this data and collectively, as an industry, I think we need to go there."

Innovation is also a key driver of growth, but Ferguson says many companies make the mistake of focusing too much on the next big thing. "At SCI we often find that innovation comes through our lean culture, where little inventions and prototypes are created to improve efficiency," he says. Automating proven lean processes that now are being handled manually and capitalizing on the explosion of handheld devices to access information are two areas where SCI expects to see a lot of innovation in the future.

To view the video in its entirety, click here


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Marketplace trends impacting third-party logistics growth include a growing demand for services that go beyond traditional logistics, more and cheaper automation of processes and more complex deliveries that include services like equipment setup and installation, says Ferguson. The biggest market driver, however, at least in Canada where SCI is a prominent player, is the double-digit growth of ecommerce, he says. "We are seeing tremendous opportunities emerging there."

One impact these trends are having on 3PLs is a change in the services that companies are outsourcing, Ferguson says. "We are seeing a propensity among customers to insource some of the more traditional logistics functions and to outsource things like technology and more complex services."

Customers traditionally have asked SCI to provide technology to support their logistics processes, says Ferguson. "But today, especially in ecommerce, there is more emphasis on the consumer experience and we consequently are seeing a lot more interest in externalizing our data and making it compatible with handheld technology, such as smart phones and iPads. Our technology is more and more extending beyond the four walls to help make that consumer experience better.

"Our customers may not previously have thought of us as a data source, but we control certain data that they can use to make better decisions in areas like demand forecasting, delivery networks and, again, the consumer experience," Ferguson says. "I think there is a real opportunity for 3PLs to use this data and collectively, as an industry, I think we need to go there."

Innovation is also a key driver of growth, but Ferguson says many companies make the mistake of focusing too much on the next big thing. "At SCI we often find that innovation comes through our lean culture, where little inventions and prototypes are created to improve efficiency," he says. Automating proven lean processes that now are being handled manually and capitalizing on the explosion of handheld devices to access information are two areas where SCI expects to see a lot of innovation in the future.

To view the video in its entirety, click here


Keywords: Supply chain, it supply chain, supply chain management, it supply chain management, supply chain management it, supply chain management scm, value chain, value chain it, 3pl, global logistics, third party logistics, logistics management, logistics & supply chain, logistics services, supply chain solutions, logistics it solutions, supply chain planning, supply chain systems, supply chain services

Factors Enabling Future Logistics Growth