The 3PL has been around for decades. It started when an accounting and consulting firm noticed that a Japanese client had people from a forwarder in their offices to handle exports. This was a common practice in Japan. But the firm promoted it and created a buzzword--third party logistics. 3PL. Outside logistics providers. Done by outsourcing.
And RFPs had something new to bid about. Those bids eventually devolved this "new" concept into a commodity service based on pricing.
It is time for change. More to the point, it is time for Blue Ocean Strategy. This became apparent with e-commerce and velocity, end-to-end. The 3PL was based on logistics--warehousing, transportation, or freight forwarding.
The pandemic made the need to move on more apparent. Supply chains struggled through supply shocks and demand shocks. End to end. It is time to transition from logistics providers to supply chain providers. Time for the 3PSCM. Time for a disruptor.
Supply chains are large and complex. Filled with nodes and links. Many stakeholders and participants. A process that crosses the vertical organization. That extends beyond the company. Upstream where suppliers are and where the supply of supply chain management begins. Supply chains within supply chains. Downstream where customers are. The customer experience. And the technology that is required to manage this.
Logistics is not a standalone. It is a derivative of a supply chain and that the supply chain gives context to the logistics. It is about its value and role in supply chain management. It is about the supply chain process and embedding it within the supply chain can increase operations performance.
Putting 3PSCMs into the supply chain adds visibility, control, and management. Adding and integrating technology and supply chain visibility is enhanced. That is how it should be done.
Bring the 3PSCM, with its logistics activity, into the supply chain management organization. A hybrid of an outsourced service and of a part of the SCM. This elevates the logistics segment and how it should be managed. And the need and importance for this new business model grows as the size of supply chain organization does.
Something for manufacturers, retailers, 3PLs, and investors to think about.
