2014 CSCMP Presentation of the 2015 3PL Study

12015 Third-Party Logistics Study – Results and Findings of the 19th Annual Study

2015 Third-PartyLogistics Study

The State of Logistics Outsourcing

Results and Findings of the 19th Annual Study

Twitter Feed: #3PLStudy


Contents About the Study

Current State of the 3PL Market

Special Topics

- CRM and Mobile Technologies

- Omni Channel

- Strategic Workforce Management

- Mexico

Strategic Assessment


2015 19th Annual 3PL study – Major research thrusts

Customer Study

E-Mail SurveyMajor Industry Verticals

Special Topics

Focus InterviewsKey Industry Experts

Facilitated Discussions

Capgemini AcceleratedSolutions Environment (ASE)

San FranciscoLondon

Singapore

Paris

Amsterdam

New York

Berlin

Hong Kong

Shanghai

Chicago

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

São Paulo

Sydney


Recent 3PL Study themes

www.3plstudy.com

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


Profiles of respondents represented

40%

44%

16%

User

3PL/4PL

Non-user




Special Topics


- Omni Channel


- Mexico



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


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 RateChanged From 60%

Changed To 66%

Order AccuracyChanged From 61%

Changed To 66%


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

Shippers Providers

1. Transportation management (execution)

2. EDI3. Transportation management

(planning)4. Warehouse/DC management5. Visibility (order, shipment,

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

order tracking, inventory, etc.

1. EDI2. Transportation management

(execution)3. Customer order management4. Transportation management

(planning)5. Visibility (order, shipment,

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

order tracking, inventory, etc.


The “IT Gap”

02 03 04 05 06 07 08 09 10 11 12 13 140%

20%

40%

60%

80%

100%

120%

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%

IT Capabilities Necessary Element of 3PL ExpertiseShippers Satisfied with 3PL IT Capabilities

Year

IT “Gap”




Special Topics


- Omni Channel


- Mexico



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


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

ManagementCustomer Service

Information Flow

Information Flow

Warehousing Material Flow

Transportation

Role of cloud-based solutions

3PLs and Cloud-Based

Solutions

Information Flow


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 Service4

Automated

Information Updating5

Safety of Shipments6

AGREED that CRM is essential to providing capable support to customers

77%PROVIDE

RS

70%SHIPPER

S


“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


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


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

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%




Special Topics


- Omni Channel


- Mexico



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

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 RFIDMobile

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


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


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




Special Topics


- Omni Channel


- Mexico



Did you know?


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


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


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


Organizational Challenges to Workforce Management




Special Topics


- Omni Channel


- Mexico



Mexico is a leading Latin American nation specializing in manufacturing and exports of goods

Mexico – Economic Overview

All figures ending 2012Source: “The Global Competitiveness Report 2013 -2014”:World Economic Forum, Index Mundi

GDP $1,177.4 bn

GDP per capita $10,058.5 GDP PPP* as (%) share

2.16% of world total

GDP

Total Investment (% of GDP) 24.68% Gross National Savings (% of GDP) 23.74%

Investment and Savings

Import $370.8 bn Import Partners US (50.5%), China (15.5%)

Japan (4.8%) Export $370.9 bn Export Partners US (78%)

Import and Export

MEXICO

Population 114.8 mn Labour Force 50.64 mn Median Age 27.7 yrs

People


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


From a business perspective, Mexico is renowned as a low-cost manufacturing and export destination


Top industries doing business in Mexico


Moving operations to Mexico


Moving operations to Mexico and Why


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


Opportunities


Trends in Logistics Service Offerings in Mexico




Special Topics


- Omni Channel


- Mexico



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


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

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