Only 30% of 3PLs are using cutting edge technologies
Logistics leaders, particularly at smaller third party logistics companies (3PLs), should not underestimate the role of technology in plugging an unprecedented skills gap. This is the finding of a new white paper by Advanced Business Solutions (Advanced), a leading business applications and services provider.
The logistics industry is worth £74.5billion to the UK economy and employs around 2.2 million people*. The white paper analyses the issue of a growing skills gap, recently highlighted in a report by Capgemini**. This report also revealed that 79% of 3PLs are unprepared for the impact this could have on their supply chain.
The white paper highlights how many logistics leaders recognise that by investing in technology, such as warehouse management systems (WMS) and cloud hosting, they can streamline operations, enabling them to continue meeting demand without increasing headcount. However, research shows that only about 30% of 3PLs are using cutting edge technologies, the majority of which are large businesses.
Independent research carried out by the Knowledge Transfer Partnership at Westminster University, interviewing UKWA members*** has highlighted some of the reasons why more, particularly smaller, 3PLs aren’t currently embracing the advantages that technology can provide.
These barriers include a lack of funding and resources, and insufficient time for researching the market for new solutions and technologies, alongside existing out-dated systems that are unable to support new systems. Smaller companies are also more likely to be focused on short-term, tactical objectives rather than long-term strategic advantage.
There may be limited visibility and traceability of data within smaller 3PLs due to them not yet having fully automated business processes. Even if a standalone WMS is in place to capture this data, it may not be well integrated with the organisation’s other solutions, creating silos of out-of-date information. This lack of information can leave smaller companies reticent about how taking on a larger, more advanced system.
Simon Fowler, Managing Director, Advanced Business Solutions (Commercial division) says, "If small and mid-sized 3PLs are to add value and remain competitive, they need to exploit the opportunities of new technology such as real-time visibility, one version of the truth, forecasting opportunities, faster authorisation, and reduced administrative costs.
"The continued success of global supply chains depends on managing data and being able to make more informed decisions, and without this there is a real danger that manufacturers and retailers, who are increasing their own use of technology, will move their logistics in-house.
"Leading 3PLs already understand that business competition is increasingly being won through supply chain efficiency and are embracing new technology, providing end-to-end solutions for their customers.
"Smaller 3PLs cannot afford to be left behind, it is more crucial than ever for them to incorporate technology to help conquer current - and future – market challenges."
Advanced recently held a roundtable event with the United Kingdom Warehousing Association (UKWA), a professional body representing public warehouse keepers in the UK, to discuss these issues.