COVID-19 and disruptions in the global supply chain helped define the areas in which third-party logistics providers (3PLs) and shippers must work together to navigate supply chain complexities.
By BEUMER Group
Cooperation between shippers and 3PLs – such as those working with fashion fulfilment centres – can help create innovative solutions that will benefit everyone in the future. To make it work, shippers must express their needs and challenges while 3PLs must listen and find paths to address and adapt — and both must recognise the value of these investments and partnerships.
Here are five ways that both can more successfully partner and innovate.
Regular reviews between 3PLs and their customers are perfect opportunities to discuss performance and issues. These reviews can provide perspective on current performance and stimulate broader discussion on the shipper’s supply chain ambitions and concerns, providing opportunities for 3PLs to consider how their services can evolve to meet their customers’ needs. For example, shippers and 3PLs are beginning to develop more long term relationships which enable the 3PLs to make longer term investments.
This complex moment in time also presents a major opportunity for shippers to reinvent their supply chains. Key to this transformation will be the way they work with 3PLs— and for 3PLs to understand the evolving needs of shippers.
Enterprise resource planning (ERP), warehouse management (WMS), transportation management (TMS), global trade management (GTM), procurement and the other applications that are part of open source software supply the type of data that will support clear communication when shippers and 3PLs are reviewing performance and issues.
Open platform software is an open-ended software architecture that is able to communicate with other interfaces. It uses the Internet Protocol, meaning it is built using a language every software system understands and every web browser communicates with. The more open the software foundation, the easier it is to integrate and attach different systems to a Warehouse Control System (WCS).
Shippers and 3PLs working with fashion brands or retailers should unite in a forward-looking approach. Third-party logistics providers must bring market vision with ideas and new services based on what shippers are saying they need.
3PLs often have a presence in markets where shippers are sourcing and exporting. This local connection allows 3PLs to offer on-the-ground insight into concerns such as major weather events, sourcing issues and other challenges. Those 3PLs that bring unique insights relevant to shippers offer significantly more value.
Both shippers and those 3PLs that work in fashion logistics must be willing to innovate. This will require investment, but if both parties work together to define which solutions can deliver the most value, there’s a path for their mutual investments to realise value faster and each will share in the benefits. And the current tendency towards long term relationships means that any investment will pay dividends for years to come.
An investment in open platform software, such as a WCS, with an open-ended software architecture that’s able to communicate with other interfaces, for example, will pay dividends long into the future. As it uses the Internet Protocol, it’s built using a language every software system understands and every web browser communicates with.
The more open the software foundation, the easier it is to integrate and attach different systems to a WCS. Open integration allows for the future integration of new software, including software from third-party suppliers – which is critical to avoid becoming dependent on the vendor.
Shippers want and need top level service from their logistics partners. Beyond basic logistics, they want a trusted provider that delivers new services such as advisory and supply chain consulting services, analytics capabilities, e-commerce channel management capabilities and even algorithms that match demand and supply.
Shippers want a logistics partner that knows their business and will work with them to overcome challenges. They need 3PLs working in fashion and other logistics areas to build service consistency, flexibility and responsiveness and to guarantee efficient delivery of shipments containing the exact contents that were ordered.
Shippers are eager to partner with 3PLs that have data and analytics capabilities to provide visibility and insights to help them make better supply chain decisions. Open software for a fashion distribution centre’s WCS ensures that the most relevant and latest version of the software can be installed without the disadvantage of having to upgrade the entire WCS software – only certain services will be involved in the upgrade.
The modular, multi-layered design of open software systems means that fulfilment houses don’t need to embark on complete software overhauls all at once. In fact, with open software it’s possible to update older systems, step by step, without disturbing old functionalities.
One of the biggest benefits of a modern open software WCS is the ability for the fashion fulfilment centre to gain insights from the big data collected during its operations. This can be achieved because modern and open WCS architectures communicate through events, which can be easily collected by data analytics tools. This data can then be used in handling strategy and system performance and efficiency to optimise system fulfilment or distribution processes and make continuous improvements.
Shippers are choosing to work with businesses whose philosophies are more integrated with their own and share their values.
Sustainability is a key issue and becoming a requirement for all players. Third-party logistics providers working in fashion and retail fulfilment will need to focus on these capabilities and many logistics providers are already working to adapt to changing shipper needs.
Shippers are setting increasingly ambitious sustainability goals, many of which involve their supply chain and logistics operations. The 3PLs that invest in products and services that align with their customers’ sustainability goals will provide greater overall value. Research shows that 93% of logistics companies are looking to include sustainable and green logistics and transportation capabilities in their service offerings.
Working together, shippers and 3PLs involved with fashion fulfilment can drive innovation and alleviate some of the challenges they face. It’s two-fold: 3PLs need to up their game, and shippers need to fully evaluate 3PLs to ensure that they’re getting the most out of those relationships.
The ability to adjust to new ideas and face the challenges of rapid change using teamwork and data is the fuel that will allow 3PLs and shippers to attain positive results in the tumultuous world of logistics.
It is clear that real partnerships and clear communication using the types of tools available in open source software will be vital to all players when navigating the years ahead.
