New report finds major analytics gap for 3PLs and shippers

95% of shippers and 99% of 3PLs agree that analytics are a necessary element of 3PL expertise but only 26% of shippers and 27% of 3PLs are satisfied with current analytic capabilities.

(PRNewsfoto/Penske Logistics)

A new 3PL study from Infosys ConsultingPenn State University and Penske Logistics has found that there is a major gap between the perceived need for analytics and the current capabilities deployed by shippers and 3PLs. In the study 95% of shippers and 99% of 3PLs agree that analytics are a necessary element of 3PL expertise. But, only 26% of shippers and 27% of 3PLs are satisfied with current analytic capabilities. Major roadblocks lie in creating clean and useful data, and insufficient resources to best utilize analytics, such as a team of data scientists. This has created a large analytics gap that warrants further study.

According to the study a big roadblock is when the shipper and 3PL are not in total agreement on a strategic plan on the best use of analytics. The report authors believe it could be a battle of the old vs. the new. Many shippers currently employ legacy systems that are difficult to connect with today's hardware and software. In general, the supply chain, like many areas of the business world, may be slow to adopt new approaches.

Other main topics include the growth of supply chain finance and the continued greening of the supply chain:

  • When shippers turn to 3PLs for supply chain improvements, what is their biggest need? That would be technology. Top 3PLs have already built out a robust tech infrastructure that contains the right tools for the job and best practices already realised by being field tested with an array of customers.
  • What are top challenges in the modern supply chain? The study lays out a half-dozen common concerns: E-commerce growth; economic uncertainty following what is arguably the longest bull market run in the history of the stock market; the truck driver shortage; disruptive technologies (e.g., drones, automated vehicles, cloud-based capabilities); relationship necessities, namely supply chain alignment strategies; and competitive challenges.
  • As geopolitical volatility affects global operations, supply chain finance is becoming critical. The survey revealed that 26% of shippers employ a supply chain finance professional at the vice president level; 31% report having someone with the director title. For shippers their top supply chain finance costs are freight payment audit (72%), total landed cost (57%) and letters of credit (37%). For 3PLs, top supply chain finance costs are freight payment audit (71%), letters of credit (39%) and open accounts (36%). The study also unearthed that 70% of shippers manage their impact of global political decisions internally; 20% aren't managing it at all; and 19% use 3PLs to do so.
  • The greening of the supply chain continues on. Why do shippers and 3PLs feel the need to introduce more sustainability into their supply chains? The top reasons are regulatory requirements, public perception and cost savings. For shippers these are the leading uses: optimisation, such as route and load (76%); tracking and reporting emissions (42%); voluntary programs (38%) like the U.S. Environmental Protection Agency (EPA) SmartWay program; and the use of alternative fuels (16%). For 3PLs, the lists reads as follows: optimization (78%); voluntary programs (63%); tracking and reporting emissions (39%); and using alternative fuels (19%). Today's heavy-duty Class 8 trucks get better fuel efficiency when they're outfitted with effective aerodynamic packages, employing late model trucks with cutting-edge engines that lead to better miles per gallon results, and have truck drivers that are better trained. Electric vehicle technology is a hot topic.

Shanton Wilcox, head of North America Supply Chain, Infosys Consulting: "Natural, political and operational disruptions are the new normal in today's global supply chains. To mitigate these risks, companies are increasingly leveraging supply chain finance."

Joe Carlier, senior vice president of global sales, Penske Logistics: "There are many benefits to a more sustainable supply chain. We have a responsibility to be better environmental stewards. A smarter and more agile supply chain is also cost effective."

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