Everything interesting, new and useful about the logistics and 3PL Industry

Posts tagged “3PL

Introducing “Outside the Box” Technologies into Your Business

Thinking outside the box” is a mantra that has always been valuable in the business world. Simply put, it points to the idea that the most obvious answer to a question or solution to a problem may not be the appropriate one for the situation. By being prepared to think outside the box and embrace the unexpected, you’re opening both yourself and your organization up to a whole new world of possibilities, many of which would have previously seemed impossible with a more traditional viewpoint.

In today’s modern climate, technology is advancing at such a rapid pace that thinking “outside the box” isn’t just a recommendation – it’s practically a requirement. There are a few key “outside the box” technologies in particular that have potentially dramatic implications for third party logistics providers all over the world.

3D Printing

One of these bold new technologies is 3D printing, which is also commonly known as additive manufacturing. 3D printing involves the creation of almost any three dimensional object that you can think of through a process in which layers of material are continually laid down on a surface under the control of a computer. Using only a 3D printer, a connected computer and a digital design, nearly any type of object can be made to a user’s exact specifications using the appropriate type of material.

For third party logistics providers in particular, the potential of this is seemingly limitless. In a White Paper written by Ken Lyon and John Manners-Bell, they use the example of service parts to get this point across. If a spare part for a particular type of machine or vehicle is required, it can be printed quickly and dispatched to the appropriate location just as fast using only a 3D printer and anLogistics 3D Printing electronic design library.

Even if the part that is required is no longer being traditionally manufactured, an existing model can be scanned in 3D and additional parts can be made on demand. 3D printing stands to not only dramatically reduce costs normally associated with warehousing and inventory, but it also has the potential to completely redefine the supply chain management process in general.

Mobile Applications

Another “outside the box” technology that can be implemented into the third party logistics business involves embracing mobile applications. Implementing mobile technology in your business is something that is handled primarily through software, thanks largely to the fact that most people already have their own Internet-ready smartphones and other devices of that nature. More specifically, Web-based and mobile order and shipment management applications can be used to gain finer control over the supply chain process than ever before. When paired with location-based tracking technology, these advancements can be used to find the exact location of individual items at a moment’s notice.

Light Picking

Another example of a benefit to be achieved by thinking outside the box includes light picking technology, also commonly referred to as “pick to light.” In this type of deployment, a light-directed system is installed in a warehouse to expand what employees are capable of doing. Lights are installed above racks, bins and other types of areas where employees will be picking items from (hence the name). When a customer places an order for a particular item or even a set of items, an associated barcode is scanned by the operator.Light Picking

Based on the items that the customer is requiring, the lights above the respective bins will illuminate and contain specific pieces of information like how many items should be picked and more. Employees will no longer have to spend varying amounts of time searching high and low for particular items. The system itself will automatically identify not only the location of those items but the quantity that is desired. The process itself becomes substantially easier and faster, increasing productivity as a result. The only expenses associated with this type of deployment include the lights themselves, the installation for the system and the dedicated software used during the picking of orders.

These are just a few of the many examples of the benefits that are associated with implementing outside the box technologies in your business. Voice picking technology, waveless technology, Kiva robots and augmented reality picking are a few more examples of advancements that are just on the horizon.

There has been much discussion regarding these and other types of “outside the box” technological advancements. Many assume that technology like 3D printing will spell “doom” for third party logistics providers. If 3D printing becomes easier, more affordable and readily available, what need will businesses have for the providers themselves? That type of thinking is shortsighted, however, as with the right attitude these technologies can dramatically benefit 3PL providers, not harm them. 3D printing, mobile technology and more – such as enhanced automation and RF operators – can make it easier for 3PL providers to do their jobs, which will only result in stronger business and better service moving forward.

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Mobile and Beyond – The Future of 3PL

The Future of 3PLBecause third party logistics providers play such an important role in the daily operations of many different types of businesses, it makes sense, to a certain extent, to always be looking toward the future to try to figure out what big advancements are on the horizon.

If you look back as recently as 10 years, the landscape of 3PL providers across the country has changed in a number of dramatic and integral ways. Popular thinking from experts, like 3PLStudy.com, has indicated that as 3PL providers continue to grow and evolve in the future, they will only ingrain themselves further into the day-to-day operations of businesses everywhere.

One of the major ways that third party logistics is expected to change in the future has to do with an increased emphasis on mobile applications of all types. Those in the industry are already seeing the beginning of this type of change. Work that was done on a desktop or, at best, on a laptop computer is now also available on a smartphone, tablet or some other type of portable device.

Current trends expect this emphasis on the mobile landscape to increase dramatically moving forward. The prominence of this trend was confirmed in the 2014 Third Party Logistics Study conducted by 3PLStudy.com. More specifically, the study indicated that paper records of all types and nearly every other function currently expected from a third party logistics provider will be available on mobile devices in the next 10 years for businesses to use while on the go.

Another important change in third party logistics has to do with an equally massive change in the economy and in business in general. Analysts, such as at Deloitte, are predicting a dramatic globalization of the economy to take place by 2020. As businesses continue to grow, they need to operate not just on a national scale but on the global landscape to thrive and continue to stay profitable. As technology continues to advance and connect businesses together in new and interesting ways, the world gets smaller as a result. Supply chains will only get more intricate and complex as costs begin to vary wildly based on the scope of a business. As a result, third party logistics providers will need to meet all of these demands in order to not only stay functional within this globalized business environment but to stay relevant at the same time.

Another key change that will take place in the future of third party logistics is an increased level of collaboration between 3PL providers and the shippers that they’re doing business with on a regular basis. Technology is already paving the way for this type of relationship to take place in the present day, so the natural evolution of that relationship is to take things to the next level. Thanks to online Web portals and mobile applications that allow for more intricately managed inventory by vendors, vendors will be able to monitor the inventory of a supplier themselves and make resupply decisions based on demand and current trends. This type of information sharing and others will become more and more critical as third party logistics providers will need to be as flexible as possible to help maintain the speed and integrity of the services that they’re offering to businesses on a daily basis.

We are living in a rapidly evolving and exciting time. The key is preparing yourself, so you can properly adapt to whatever comes your way. Remember to always be looking towards the future to stay ahead of the game.

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The True Value Adders – 3PL Service Providers

3PLs and their clients share a unique relationship. When a prospective client is sourcing for a potential firm to do business with, they are looking for a variety of key business offerings. To meet this demand, 3PL firms offer a number of key services to ensure their clients’ companies receive stellar service and increased value to the bottom line:

Expertise3PL Value Adds

A 3PL firm offers a high level of expertise in logistics and operations, resulting in a reduction of time, an improvement in carrier management, order tracking efficiencies, shipment visibility and reduced risk.

Analysis

Analyzing networks is a key process that cannot be avoided. 3PL firms are able to provide a detailed analysis of distribution and inventory while being able to make changes along the way. This keeps all changes, production and other factors up-to-date and removes the responsibility from the employees that may not have the know-how to do a thorough in-house analysis.

Cost-Containment

3PL firms have the ability to provide information on all production issues and ineffective processes, including having the ability to employ corrective measures within certain boundaries.

Strategic Capacity

3PL firms are able to strategically measure, evaluate and employ methods that will cater to an organization’s needs according to price and level of service. They are capable at resolving any issues and demands when analyzing and executing these methods using a large carrier network.

Compliance

No shipping organization can go without supply chain management. 3PL have the ability to create a reporting platform that will communicate with supply chain partners in a timely and accurate manner while providing objective feedback to improve processes.

Load Optimization

3PLs are able to give information on cost-savings achieved through load optimization based on times, dates and shipping details provided. This helps optimize all shipments, removing the in-house responsibility.

Systems Support

3PLs are able to provide adequate systems support, coordinating results with the expectations of current and future customers.

Reduction of Risks

3PLs are able to evaluate and diminish easily identifiable risks, giving perspectives on how to develop a program to address those risks that are harder to pinpoint and resolve.

In a general sense, these are some key business services that many 3PLs offer and should help organizations when determining whether or not their firm is making a difference in their bottom line and serving all their needs. 3PLs after all are proven experts in the field and a highly professional and experienced one can take care of all your logistics needs.

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Warehouse Performance Metrics

In today’s high-tech environment, warehouse managers have an overwhelming abundance of data to analyze and use to determine how to improve their warehouse operations.  Without metrics, there really is no way to know what is and isn’t working in a warehouse.  The ability to set goals for delivery times, machine utilization, warehouse capacity, customer service and quality of data and analyzing if the goals were met can make a major difference in a company’s profitability.  To best work through the data, the most important step is to decide which metrics to gather, analyze and report on.  Metrics or key performance indicators (KPIs) can be gathered to report on such items as inventory, order fulfillment and operations.

Implementing a third party logistics (3PL) solution can integrate your operations, distribution, fulfillment and trucking services to provide timely, intelligent data.  This data can be mined so you can create the KPIs necessary to make the business decisions that will help you to be on the competitive leading edge.  Measuring the metrics against your goals will help you to make more intelligent business decisions.  When you’re trying to improve operations, consider the following KPIs that you can generate to monitor and measure the performance of your warehouse.

Top KPIs

Supplier On-time Delivery. This KPI provides important information on deliveries that were on time and how many arrived late.  Best in class is ≥ 99.8 percent, median is 98.5 percent.

Internal Order Cycle Time. This KPI is measured from the time an order is placed to the moment it gets shipped.  It is used to measure the pick-pack-ship efficiency of the warehouse. The objective is to minimize the percentage. Best in class is < 3 hrs, median is 13 hrs.

Dock-To-Stock Cycle Time. This cycle time measures the time from the start of a receipt to the time that putaway is complete.  This is an important KPI to measure the performance of inbound activities.  Best in class is < 2 hrs, median is 6 hrs.

Order Picking Accuracy. Order picking is the most costly and labor intensive function in a warehouse.  This measurement is critical to monitor for the success of warehouse operations.  It is also an important factor when delivering high customer service. It is the percentage of pick lines picked without errors, and the objective is to maximize the percentage.  Best in class is ≥ 99.9 percent, median is 99.5 percent.

Lines Picked and Shipped per Hour. This KPI is also important to measure to ensure high customer service.  It is based on the number of lines picked and packed/total labor warehouse hours.  Best in class is ≥ 74.2 percent, median is 28 percent .

Order Fill Rate. This KPI percentage is based on the number of items ordered to the items shipped.  The fill rate can be calculated on numerous items, such as SKU, case or on a value basis.  The best in class for items ordered to shipped is ≥ 99.8 percent, median is 98.3 percent.

Peak Warehouse Capacity. This KPI measures the amount of warehouse capacity used during a peak season.  It is expressed as a percentage of storage space that have products in them.  Best in class is ≥ 100.0 percent, median is 95 percent, but it also depends on how the product is received.  The best in class for average warehouse capacity is ≥ 91.2 percent, median is 84.9 percent.

Annual Work Force Turnover. This KPI is calculated by taking the total number of employees who resign, plus employees terminated, and divide that total by the number of employees at the beginning of the year.  Best in class is < 1 percent, median is 5 percent.

When you embark on an initiative to report on metrics, you will want to compare your KPIs against the best in class so you can identify the underperforming measures.  This will ensure that you are in a good position to know where to improve so your company can grow and stay ahead of your competitors.

Resources:

http://www.inboundlogistics.com/cms/article/warehouse-metrics-measure-what-matters/

http://www.eiminstitute.org/library/eimi-archives/volume-1-issue-5-july-2007-edition/measuring-the-data-warehouse

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Logistics Management in Third-Party Logistics

Logistics Management

Logistics management is essential in today’s global marketplace, whether you run a small shop that handles a few tons of merchandise each year, or your company ships and receives from multiple warehouses in far-flung locales. The last thing you want is to lose products, waste time or squander any operational resource because of inefficient third-party logistics (3PL). Luckily, 3PL solutions helps you solve logistics problems in warehouse settings, especially as they relate to increasing ROI, efficiency and productivity. Effective 3PL software provides the following 9 key benefits to your logistics management:

1. Security

3PL software is more expansive that a typical warehouse management system (WMS). It integrates several layers of security, which is an essential feature if your company handles sensitive materials or private products with high confidentiality options. In what is now the Internet’s era, data can be accessed via the cloud, so it’s good to have strong encryption layers in your 3PL application.

2. Reliability

You don’t want a WMS that malfunctions in the middle of an important shipment, do you? Nobody wants to lose money because of unreliable software, so choosing a solid program like 3PL software indirectly increases your ROI, logistical efficiency and customer satisfaction levels.

3. Transparency

Everything is transparent in a 3PL management suite. You see what goes out, what comes in, the final inventory balance and with which various logistics services providers you’re partnering. The beauty of the program is that you can track everything everywhere all the time.

4. 3PL Invoicing

Your ROI goes up when you can correctly bill customers on time. Inefficiency is no longer an issue in your operations when you use a 3PL program, because the system automatically generates invoices based on inputted data. Make sure that you key in proper codes, data and pricing information for all clients to make the most out of your 3PL program.

5. Item Ownership at the Warehouse Location Level

You can track item ownership at the warehouse level, an important feature that gives you peace of mind when you handle several different items at multiple locations. Whether it is raw material, a work-in-process or a finished product, the software helps you track inventory in real time.

6. Self-Service: Customer Access to Their Data

Logistics problems often arise when clients can’t access or see their inventory data in the supply chain. With 3PL software, this is one headache you won’t have to worry about. 3PL software embeds functionalities that add value to clients through real-time and effective access to their shipping, receiving and ending-balance information.

7. Multiple Communication Channels

Multi-channel communication is another highly-valued feature in a 3PL program. Unlike the standard WMS, which manages inventory within proprietary warehouses for one company, 3PL management software takes care of logistics for thousands of client-owned products. Multiple communication channels become essential here as each client has specific requirements about the way products are manufactured, invoiced, packed and shipped. These channels include everything from cloud-based services to email and built-in messaging features.

8. Cost Tracking

It’s good to bill customers on time and correctly, but it’s even better to track costs for those clients. That way, you add value to clients’ operations by showing them not only their logistics expenses, but also their operational costs such as materials, labor and production overhead. Providing such services boosts your company’s bottom line and ROI because it adds tangible value to clients, which increases their loyalty and improves your brand’s reputation.

9. Industry Standard Flexibility

3PL applications have industry standard flexibility, meaning they give you state-of-the-art features as well as options that abide by the latest government regulations and industry best practices.

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