Executive Briefings

Resiliency, Social Networking Two New Trends, 3PL Survey Finds

Natural disasters in 2011, especially the earthquake and tsunami in Japan, increased awareness among 3PLs and their customers of the need for contingency supply-chain planning, according to the 18th annual 3PL survey conducted by Northeastern University and Penske Logistics.

"The Japan disaster had an enormous impact on customers in all regions," says Robert Lieb, professor of supply chain management at Northeastern, who directed the study. "North American companies experienced supply chain disruptions due to supplier failure and unpredictable transit times."

Responses from CEOs in the survey indicate that many companies are questioning whether strategies like "lean" and "just-in-time" have gone too far, says Lieb. "The cost of having to shut down production because of supply disruptions can quickly dwarf any savings from such programs," he notes. These respondents say they will reassess inventory policies and, in some cases, broaden their supply base or even relocate sourcing or manufacturing, Lieb says. "Executives at the very top of supply chain structures are reassessing to determine what their supply chain policies and strategies should look like going forward."

Another interesting finding from this year's survey is the growing use by 3PLs of social networking, Lieb says. "About two-thirds of companies in the survey have Linked-In accounts, about a third are on Twitter, about half have Facebook accounts, and a quarter have material on YouTube," he says. The use of social networking by these companies seems to be parallel to where they were with the internet 10 to 15 years ago, says Lieb. "They are just starting to scratch the surface and figure out how to use these tools, but most believe that usage will continue to grow," he says. So far, these efforts have been focused on brand awareness and getting feedback from customers, he says.

Lieb also cites a couple of issues that remain constant from prior years. "At the top of the list is a shortage of talent," he says. "There is a chronic problem in finding and retaining managerial talent that shows up every year, across geographies," he says. A second chronic issue is price pressure. "3PLs feel they have to constantly find ways to innovate to maintain accounts," he says. "At the beginning of an engagement it is easy to find low-hanging fruit, but that becomes increasingly more difficult with each succeeding year."

To view video in its entirety, click here

Natural disasters in 2011, especially the earthquake and tsunami in Japan, increased awareness among 3PLs and their customers of the need for contingency supply-chain planning, according to the 18th annual 3PL survey conducted by Northeastern University and Penske Logistics.

"The Japan disaster had an enormous impact on customers in all regions," says Robert Lieb, professor of supply chain management at Northeastern, who directed the study. "North American companies experienced supply chain disruptions due to supplier failure and unpredictable transit times."

Responses from CEOs in the survey indicate that many companies are questioning whether strategies like "lean" and "just-in-time" have gone too far, says Lieb. "The cost of having to shut down production because of supply disruptions can quickly dwarf any savings from such programs," he notes. These respondents say they will reassess inventory policies and, in some cases, broaden their supply base or even relocate sourcing or manufacturing, Lieb says. "Executives at the very top of supply chain structures are reassessing to determine what their supply chain policies and strategies should look like going forward."

Another interesting finding from this year's survey is the growing use by 3PLs of social networking, Lieb says. "About two-thirds of companies in the survey have Linked-In accounts, about a third are on Twitter, about half have Facebook accounts, and a quarter have material on YouTube," he says. The use of social networking by these companies seems to be parallel to where they were with the internet 10 to 15 years ago, says Lieb. "They are just starting to scratch the surface and figure out how to use these tools, but most believe that usage will continue to grow," he says. So far, these efforts have been focused on brand awareness and getting feedback from customers, he says.

Lieb also cites a couple of issues that remain constant from prior years. "At the top of the list is a shortage of talent," he says. "There is a chronic problem in finding and retaining managerial talent that shows up every year, across geographies," he says. A second chronic issue is price pressure. "3PLs feel they have to constantly find ways to innovate to maintain accounts," he says. "At the beginning of an engagement it is easy to find low-hanging fruit, but that becomes increasingly more difficult with each succeeding year."

To view video in its entirety, click here