solutions – a jump of 14 percent and 8 percent, respectively, from last year. This upward trend reflects the increasing dependence outsourcers place on their 3PLs to engineer pre- scriptive solutions that radiate further into the supply chain. Working closer with vendors and suppliers enables stateside shippers to leverage greater control over inventory to help them better forecast volume, control supply as demand varies or when disruptions occur, and reduce total landed costs. Public and private initiatives aimed at “greening and leaning” the supply chain have similarly heaped pressure on companies to examine ways they can more efficiently man- age and control products during their entire lifecycle. The European Commission, for example, has mandated that European appliance and electronics manufacturers assume responsibility for products after they have outlived their expected use. In time, U.S. man- ufacturers may face similar directives, placing additional emphasis on prod- uct lifecycle management as well as reverse logistics – a service which 74 percent of 3PLs currently offer.
(10.8 percent this year, compared to 13.8 percent in 2006). The importance of driving supply chain and transportation efficiencies from the point-of-origin has never been greater and has necessarily com- pelled 3PLs to shape their global solution portfolios with stateside con- signees in mind. Inbound logistics and integrated logistics services rank high among service providers, with 88.6 percent and 83 percent respec- tively offering capabilities in these areas. Both figures represent marked growth over last year’s reported data. Taking Inventory Companies are also looking to more efficiently rationalize inven- tory in the pipeline to counter potential supply chain disruptions and shifting consumer demand. The number of 3PLs providing inven- tory management capabilities (76 percent) reflects a nearly 10-percent increase over last year. Just-in-time (JIT) strategies and service capabilities, by contrast, are losing some luster (67 percent of 3PLs offer JIT compared to 70.8 percent in 2006) as manufacturers and retailers balance the business costs of running lean with customers running out of stock – and running to other 3PLs. Demand for sophisticated infor- mation technology is expectedly keeping pace with the evolution of strategic supply chain tactics. Logistics service providers are rapidly building their IT capabilities to cre- ate value for outsourcers, as well as to help them engage in increasingly complex supply chain initiatives. Dovetailing technology needs and strategic designs account for growth among 3PLs offering vendor management and product lifecycle management solutions, with 75 per- cent and 45 percent of respondents providing these forward-thinking
JIT service capabilities
are losing some luster
as manufacturers and
retailers balance the
business costs of running
Transportation & Technology
lean with customers
The trials and travails of managing complex freight movement continue to yield growth opportunities for 3PLs with solid track records in transporta- tion management. The uncertainty of fuel prices and truck capacity, and the certainty of fewer drivers and higher equipment costs, inevitably push shippers to outsource non-core trans- portation activities. On the domestic front, truckload (TL) and less-than truckload (LTL) ser- vices are in high demand, offered by 94.9 percent and 91 percent of 3PLs ( see Figure 4, Transportation Services 3PLs Offer ). Reducing transport spend
running out of stock — and
running to other 3PLs.
104 Inbound Logistics • July 2007
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