Industry Talk

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

Logistics in the Data Era: Redefining Value, Opportunity, & the Modern 3PL

Having the most up-to-date information the fastest has always been a competitive advantage in the logistics industry. However, in the past decade, a surge of investment in logistics technology has flooded the market, aimed at enhancing information flow and visibility in goods movement, while minimizing transactional friction, mitigating risk, and boosting efficiency.

This influx has increased access to data and changed the role and value of information in logistics, leading the industry to become much more interconnected from first-to-final mile. In many ways, that access has leveled the playing field for operators and tech providers, with the opportunity to stand out becoming harder to earn.

If you are a supply chain technology provider, the opportunity to differentiate by providing better/faster data and insights is harder. Near real-time visibility already exists for many aspects of the supply chain and is available at scale. Ocean containers and domestic shipments can be tracked from origin through destination. Individual packages can be tracked from receipt to inventory, through fulfillment, to delivery. Some tech solutions are even tracking individual pieces in these packages.

While continuous improvement will always be needed to ensure near-perfect consistency and accuracy, the volume of information and access to the visibility of goods movement is incredible. This is creating real questions around what to do with so much visibility.

Is more always better? Providing “100% supply chain visibility” is a nice aspirational goal, but the real wins come from finding the right balance between the percent that is truly actionable versus the percent that just feels good to have.

This percentage is different depending on the user, and the opportunity to differentiate for tech providers lies in knowing their user audience—their specific operational practices and capabilities—enough to deliver the percentage visibility that unlocks the most value.

If you are a supply chain operator on the other hand, the way to differentiate has evolved with broader access to market information, which has created an unprecedented level of transparency. Everyone has access to the same information, so “outsmarting” customers or competitors in terms of price is an outdated model.

Earning business through differentiation as a supply chain operator has become intertwined with efficiently providing unique value. Value comes from the intelligent coordination of assets, data, and creative problem solving to deliver solutions that make your customer’s business better. In other words, logistics has become a solutions business where innovators, operators, and occasionally even competitors work together to achieve tangible value for the customer.

This evolution has critically impacted the relationship between customer and logistics provider. To provide tangible value, providers need to cultivate a much deeper understanding of their customer’s business, which naturally drives a more customer-centric approach.

In an environment that constantly puts pressure on speed, accuracy, and cost, focusing on delivering tangible value incentivizes a shift in the customer-provider partnership away from a transactional mindset in favor of long-term, strategic relationships. Working closely together for longer periods of time builds knowledge. When that knowledge is combined with the type of insights that are now available, the customer-provider relationship is better positioned to take quick and decisive action together, empowering continuous improvement.

It is a unique time in the logistics industry as operators and tech providers are more often occupying the same space. There is more data and visibility available than there ever has been, which in some respects has created a more complicated landscape. A lot of time and investment can be wasted generating information that isn’t actionable or accurate enough to support real time operations. The most actionable information wins, and innovation that doesn’t support operations is a distraction that could very well be a competitive disadvantage.

Whether you are an operator or a tech provider the core question remains: how are you combining technology innovation and operational expertise to deliver solutions that unlock real value for customers? Answering that question has become the definition of what it means to be a modern 3PL.