The key breakdown in the KFC supply chain centered around the food chain’s recent switch from a specialty food distributor to a mega-freight forwarder, which, like many third-party logistics companies, owns very few physical assets. These 3PL companies rely on a complex patchwork of individual trucking companies and other carriers to deliver their service. Communication and cooperation between the teams examining the supply chain—business continuity, procurement, logistics, and so on—is essential to reduce silos and mitigate overall risk. While many organizations seek to simplify and streamline their supply chains to maximize efficiency and profitability, reducing redundancy can also introduce risk, fragility, and an increased potential for disruption. As the e-commerce juggernaut creates more complexity for today’s logistics managers, finding the right mix of 3PLs with the essential integrated services has never been more important. In addition, companies should work to identify where their supply chains run through regions that are vulnerable to disruptive local events and build in redundancy there to circumvent disruption or supply chain bottlenecks.
- Shipper demand, vendor innovation and advances in technology have worked together to get the vision…
- As the e-commerce juggernaut creates more complexity for today’s logistics managers, finding the right mix of 3PLs with the essential integrated services has never been more important.
- Companies should speak with vendors about how local events affect them and what contingency plans they have in place, as well as engage with external geopolitical risk experts who can offer unbiased analysis and context.
- Communication and cooperation between the teams examining the supply chain—business continuity, procurement, logistics, and so on—is essential to reduce silos and mitigate overall risk.
Complex supply chains can hide diamond-shaped chains, in which most or all vendors source a component from a small group of suppliers. For example, dye pigments used in many manufacturing industries are only made by a few factories in one region of Japan. A natural disaster in that region that halted production would disrupt all industries that use that pigment. Curran led OHL through several years of sustained growth culminating in the sale of the company to Geodis in 2015. At the time of the sale, OHL had 120 value-added distribution centers in North America with more than 36 million square feet of warehouse space, along with 8,000 employees. Industry insiders coming to grips with the dynamic changes shaping both the domestic and global third-party logistics marketplace have come to similar conclusions about the future.
Armstrong & Associates Top 50 Global 3pls April
Localized low-impact, high-likelihood events pose risks to supply chains around the world without making international news and can create “cascading risk” in which disruptions in one part of the supply chain create additional problems downstream. KFC’s parent company, Yum Brands, reported on May 2 that the supply chain problems would negatively affect earnings. In a move perhaps signaling a new wave of merger and acquisition activity in the 3PL sector, the firm of Welsh, Carson, Anderson & Stowe recently formed a strategic partnership with a prominent industry https://www.yelp.com/biz/uss-express-delivery-chicago veteran to spot candidates for purchase. He adds that it has left him a bit “chagrined” because he had been among the chief skeptics about the company’s aggressive strategy in the past. The move to Cloud-based technology is also making supply chain platforms more accessible for smaller 3PLs, says Jon Slangerup, CEO of American Global Logistics . He adds that modest-sized 3PLs like AGL are often naturally more agile than their enterprise counterparts, and still have the right tools to provide the shipper with a competitive edge against the big guys.
Having one company coordinate all activity can lead to an onion-like structure of contracting and subcontracting that reduces visibility into who is actually carrying a company’s cargo at any point in time. The breakdown of Kentucky Fried Chicken’s supply chain in the United Kingdom in February 2018 provides a cautionary tale about hidden vulnerabilities in supply chains that all organizations should note. Sue Fangmann, U.S. supply chain services director at McDonald’s, says that having a solid relationship with several 3PLs can help avoid a catastrophe similar to that of KFC in England earlier this year. https://nandnlogistics.com/ “This is particularly true in the European Union where the pressure for land and warehouse utilization is far greater,” she says. Furthermore, she advises shippers to define the relationship from the outset and have an exit strategy if things don’t work out. A new case study undertaken by Gartner and McDonald’s Corp. reveals that having “skin in the game” is essential for future collaboration. “A Shipper’s Journey to Achieve the 3PL Partnership Panacea,” presented at the recently concluded “Supply Chain Executive Conference” in Phoenix, provided a compelling argument for improved, dynamic partnerships.
Gross Logistics Revenue
For example, shippers should expect daily forecasts with 99% reliability with shipments of perishables. Shipper demand, vendor innovation and advances in technology have worked https://uss-express.com/about-us/ together to get the vision… Two-thirds of KFC’s nearly 900 UK locations were affected by the breakdown, which led to shortages of chicken, gravy, and many other supplies.
Perry adds that significant advances in visibility technologies have created a wide range of perceptions and expectations among shippers—including some that are inaccurate. At the same time, other industry analysts and trade associations are making a case for 3PLs to take on more of a leadership role in capturing market intelligence. In case there is a business continuity issue with one of them, one of the others may be able to fill in. Companies should speak with vendors about how local events affect them and what contingency plans they have in place, as well as engage with external geopolitical risk experts who can offer unbiased analysis and is uss express legit context. Logistics buyers should conduct in-person checks of at least a slice of the 3PL partner’s subcontractors to directly check out their quality, business continuity, and security practices. Companies should work with their 3PL partners to keep track of which carriers will be used for their shipments and ensure that their quality and security requirements are cascaded down to subcontractors in contractual language with the 3PL. According to David Gonzalez, a Gartner analyst, the investment in functional technology has always been important for both shippers and their 3PLs, but “value-added” technology is becoming increasingly vital.
Top 50 Us And Global Third Party Logistics Providers 3pl In 2017: Collaboration Is Now Paramount
Two months after the initial crisis, less than half of the locations uss express com review were serving a full menu, according to HuffPost UK.
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Here’s a closer look at some of these key factors shaping today’s market and advice for navigating this complex new landscape. According on Chris Burroughs, senior director of government affairs for the Transportation Intermediaries Association , 3PLs are digging deeper into data and analytics https://uss-express.com/about-us/ to help logistics managers keep pace with today’s volatile marketplace. “Simultaneously, 3PLs may find themselves shouldering a greater responsibility to spot and suggest opportunities for overall operational changes—even outside the supply chain—that benefit shippers,” he says.
Ls As Business Intelligence Leaders
Indeed, spotting new trends in the 3PL arena both domestically and globally may yet become more challenging. Consider the ever-changing regulatory climate in the Asia Pacific, along with the gathering e-commerce storm breaking all over the world, one may only wonder how shippers will select the right partners in the future.
A Shippers journey
For Evan Armstrong, the consultancy’s president, one of the chief takeaways from the firm’s most recent Top 50 global 3PL research was the dynamic role played the Asia Pacific in the global arena. “Absent any new trade wars or regulatory upheaval, we believe APAC will continue to generate revenue and create opportunity for expansion in worldwide 3PL markets,” is uss express legit he says. In some cases, it may be more sustainable in the long term to work with a roster of several approved logistics companies, granting delivery lanes to each one depending on where their networks are the most dense and robust. Companies can then compare performance across lanes and re-allocate them as the better performing providers rise to the top.