2015 Third-Party Logistics Study

The State of Logistics Outsourcing

Results and Findings of the 19th Annual Study

Twitter Feed: #3PLStudy

2 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Contents � About the Study

� Current State of the 3PL Market

� Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

� Strategic Assessment

3 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

2015 19th Annual 3PL study – Major research thrusts

Customer Study

E-Mail Survey Major Industry Verticals

Special Topics

Focus Interviews Key Industry Experts

Facilitated Discussions

Capgemini Accelerated Solutions Environment (ASE)

San Francisco London

Singapore

Paris

Amsterdam

New York

Berlin

Hong Kong

Shanghai

Chicago

Each year, workshops are held in different locations around the world

São Paulo

Sydney

4 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Recent 3PL Study themes

www.3plstudy.com

This  year’s  special  topics: • CRM and Mobile Technologies • Omni Channel • Strategic Workforce Management • Mexico

5 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Profiles of respondents represented

40%

44%

16%

User

3PL/4PL

Non-user

6 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Contents � About the Study

� Current State of the 3PL Market

� Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

� Strategic Assessment

7 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Outsourced logistics services

Outsourced Logistics Services

Percentages of 3PL Users

Order management and fulfillment 18%

Inventory management 18

Supply chain consultancy services provided by 3PLs 15

Information technology (IT) services 15

Service parts logistics 14

Fleet management 13

LLP (Lead Logistics Provider) / 4PL services 11

Customer service 5

Sustainability/green supply chain-related services 3

Outsourced Logistics Services

Percentages of 3PL Users

Domestic transportation 80%

International transportation 70

Warehousing 67

Customs brokerage 53

Freight forwarding 51

Reverse logistics (defective, repair, return) 36

Freight bill auditing and payment 33

Product labeling, packaging, assembly, kitting 30

Cross-docking 30

Transportation management and planning 25

8 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Benefits delivered by use of 3PL services

Benefits 2015 Study Results

Logistics Cost Reduction 9%

Inventory Cost Reduction 5%

Logistics Fixed Asset Reduction 15%

Order Fill Rate Changed From 60%

Changed To 66%

Order Accuracy Changed From 61%

Changed To 66%

9 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

What tools 3PLs need to be successful (top 6)

Shippers Providers

1. Transportation management (execution)

2. EDI 3. Transportation management

(planning) 4. Warehouse/DC management 5. Visibility (order, shipment,

inventory, etc.) 6. Web portals for booking,

order tracking, inventory, etc.

1. EDI 2. Transportation management

(execution) 3. Customer order management 4. Transportation management

(planning) 5. Visibility (order, shipment,

inventory, etc.) 6. Web portals for booking,

order tracking, inventory, etc.

10 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

The  “IT  Gap”

89% 85%

91% 90% 92% 92% 92% 88% 94% 93% 94% 98% 96%

27% 33% 42% 40% 35% 42% 37% 42%

54% 54% 53% 55% 60%

0%

20%

40%

60%

80%

100%

120%

02 03 04 05 06 07 08 09 10 11 12 13 14 Year

IT Capabilities Necessary Element of 3PL Expertise Shippers Satisfied with 3PL IT Capabilities

IT “Gap”

11 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Contents � About the Study

� Current State of the 3PL Market

� Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

� Strategic Assessment

12 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

3PL CRM solutions leverage mobile and cloud technologies

3PL

Customers

Customer Relationship Management

� 3PLs provide more timely information better service to customers

� Solutions provide real-time visibility into the extended supply chain

� Mobile solutions help 3PL players with shipment-specific services such as track and trace

� Integration with TMS and WMS solutions

Leveraging Mobile

Technologies

Leveraging Cloud - based

solutions

� Cloud-based CRM solutions enable 3PLs to launch new services, target new industries, and address global supply chain issues

� Enhance information flow between 3PLs and customers to help reduce costs, improve operational capabilities, sourcing activities, etc.

� Provide end-to-end solutions for entire supply chain

13 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Cloud- based CRM solutions lead to greater customer service and enhanced visibility for 3PL customers

Source:    “Role  of  IT  in  3rd  Party  Logistics  providers”:HRMars

Inventory and Logistics

Management Customer Service Information

Flow

Information Flow

Warehousing Material Flow

Transportation

Role of cloud-based solutions

3PLs and Cloud-Based

Solutions Information

Flow

14 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

3PLs and CRM Solutions – Example benefits

Increased Productivity

Benefits

1

2

Systematic Way

to Track Business Activity

Measurability of Marketing and Sales Activity

3

Individual

Customer Service

4

Automated Information Updating

5

Safety of Shipments

6

AGREED that CRM is essential to providing capable support to customers

77% PROVIDERS

70% SHIPPERS

15 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

“Must-have”  CRM  requirements

� AVAILABILITY of real-time tracking information relating to customer shipments

� EASY access to cost and shipment pricing information

� INCREASED ability of 3PL sales executives to respond to customer requests

� GREATER visibility of global operations

� MORE professional and productive sales calls and customer presentations by 3PL sales executives

16 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

What do 3PL sales executives do with their available time?

CUSTOMER FACE-TO-FACE MEETINGS

22%

CUSTOMER-FACING PHONE MEETINGS/ CONVERSATIONS

23%55%SPEND THEIR TIME ON INTERNAL ISSUES• Internal management meetings• Responses to RFPs• Preparation and data collection• Inputting and updating data• Pricing issues

28%“Expand into new

geographies”

24%“Launch  new  services”

24%“Reduce  costs and

run a more lean

organization”“Hire more

account execs in the same

geographies”

14%“Reduce  

costs & staff functions”

10%

What if you had 20% more sales capacity through the “CRM  of  your  dreams?”

17 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Contents � About the Study

� Current State of the 3PL Market

� Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

� Strategic Assessment

18 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Retail landscape is evolving rapidly and adjusting to changes in customer’s  demand  as  well  as  technological  innovations

Executive Summary

Growing Middle Class demand

Changing Retail

Landscape Venturing new markets

Shift to non- traditional

formats

Impact on Retailers – Customer’s  Perspective

Closed Loop Marketing Next Generation

Sales

Progressive Service

Innovative Products

Customer Centered Strategy

Focus on consumer engagement

Reduction in store size

Greater utilization of store space

Shift to non- traditional

formats

Personalized products

Impact on Retailers – Technology Perspective Mobile Point of

Sale Digital Wallets

Electronic Price Tags RFID Mobile Promotions

Digital Promotions

Personalized products

Innovative Delivery

Solutions Online Shopping With Local Store

Pickup

Google Shopping Express

In-vehicle Pickup

Delivery Lockers

Sunday Delivery

Delivery Drone

Buy Online Pick Up In An Hour

Customers Delivering Packages

Warehouse Pickup

19 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

The survey data highlights the immaturity of omni-channel Supply Chains while most are focused on customer service

20 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

What is holding back Shippers from integrating Omni-channel fulfillment?

21 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Contents � About the Study

� Current State of the 3PL Market

� Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

� Strategic Assessment

22 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Did you know?

23 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Which of the following will be the primary drivers of your organization’s  success  in  the  next  5  years?  

24 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

What capabilities does your organization value most in a functional or business leader?

25 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Supply Chain Talent

� The estimated demand for Supply Chain professionals to exceed supply in the ratio of 6:1

� The average hiring growth rate expected to be higher than the average growth rate across other occupations

Industry Demands for New Supply Chain Talent

� Only  ‘hard  skills’  involved  in  operations  management  would  not  be  sufficient  in  the  future � Optimum  mix  of  both  ”Soft”  and  “Hard”  skills  involving  leadership  qualities  and  cross-functional

competencies will shape the industry � Due to dynamic nature of the industry, 3 out of 4 jobs in supply chain are expected to change by 2015

Supply Chain Professional Dynamics

� 60mn people to exit the workforce by 2015

� Only 40 mn people to fill up the gap

� More evident gap across middle and senior management level in the Transport and Logistics industry

Supply Chain Talent Gap

� Shortage of new new talent due to the constant evolution of supply chain processes

� Demand for supply chain experts to grow exponentially with demand being greater than supply across all supply chain roles

Potential Shortage

Supply Chain Talent

26 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Organizational Challenges to Workforce Management

27 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Contents � About the Study

� Current State of the 3PL Market

� Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

� Strategic Assessment

28 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

An open economy backed by sound fundamentals and several alliances offer lucrative opportunities for doing business in Mexico

29 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Moving operations to Mexico and Why

30 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Security, Crime and Corruption is the most-concerning factor for those currently doing business or looking to do business in Mexico

31 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Opportunities

32 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Trends in Logistics Service Offerings in Mexico

33 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Contents � About the Study

� Current State of the 3PL Market

� Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

� Strategic Assessment

34 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Strategic assessment topics for 2015

Evolution of the 3PL Business Model: New Competition

Supply Chain Risk Management

The Intensifying Truck Driver Shortage

Working Corporate Social Responsibility

Into the Supply Chain

35 2015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

Questions?

Thank You!

For further information:

Pick up a copy of the study at one of the Media Boxes

Check out our website at www.3plstudy.com