Summary of Key Findings
Logistics Outsourcing Practices. Most logistics and supply chain executives surveyed
in North America, Europe, Asia-Pacific, and Latin America feel that logistics represents
a strategic, competitive advantage for their companies. Two key factors relating to the selection of 3PL providers include price and quality of tactical, operational logistics services. Generally speaking, about half of 3PL users' total logistics expenditures is spent on 3PL providers. Most users characterized their relationships with 3PL providers as "successful."
3PL Service Offerings and Capabilities. Traditional 3PL services, such as transportation, warehousing, and customs clearance, are the ones most often outsourced. These are also the services most likely to be outsourced in the future by those 3PL users who plan to increase their outsourcing over the next three to five years. Value-added services has for the third consecutive year been of lower importance. Among the key challenges for the 3PL industry in the future are capacity management and innovation. While 3PL users acknowledge innovations such as lead logistics providers and fourth-party logistics (4PL) providers, significant room for improvement still exists in the knowledge and use of these approaches.
Technology Enablement. As 3PL user firms extend their supply chains around the
globe, the resulting complexity will compel management to focus more on the enabling
technologies in supply chain management, specifically IT. Ninety-two percent of this
year's survey respondents agree that IT capabilities are a necessary element of overall
3PL provider expertise.
Management and Relationship Issues. Most 3PL providers desire to move their customers from a conventional customer-supplier relationship to a true "partnership." Doing this would allay a frequent criticism from this year's survey respondents: 3PL providers many times react to situations; they do not anticipate and identify opportunities to improve. To be fair, study results also suggest that customers sometimes limit 3PL providers from demonstrating their full range of capabilities. Not so coincidentally, upgrading the 3PL provider-user relationship fits in well with a consistent theme across all regions studied-and from both 3PL providers as well as 3PL users:
Emerging Markets. In the years of this study, survey respondents have continually noted the ever-increasing effects of globalization on their business. For this reason, the 2006 study includes extra questions about the involvement of 3PL providers in emerging markets, particularly in China. Respondents generally have plans to develop a wide spectrum of logistics activities in China, the most popular being the importing and exporting of finished goods. Although 3PL users in China express a satisfaction with their 3PL providers that is similar to that reported by users in other regions, the lack of continual improvement is considered a bigger problem in China than in other areas as a whole. Generally, the continued growth of the 3PL sector in China and other emerging markets is a great opportunity for the logistics industry.
Strategic Assessment. Based on the findings from the 2006 3PL survey and associated workshops and ASE sessions with 3PL users, several key issues are central to the strategic role 3PL providers play in individual customer organizations and supply chains overall. These issues include the growth and consolidation of 3PL providers, the development of a "service portfolio" by 3PL providers, the emergence of "global 3PL providers," the need for customers to develop a "3PL strategy," 3PL user/provider relationships, radio frequency identification and IT, the future growth of the 4PL provider
concept, and 3PL providers' creation of supply chain value.
Industry Sectors Focus. As a new study initiative for 2006, the survey included additional questions for 3PL users who reported their industry as automotive, chemical,
high-tech and electronics, and life sciences and healthcare. This report contains summaries of the roles 3PL providers play in these key industries.
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