It's a good time to innovate: a CSCMP take-away
Brad Mackler is a director of client solutions at ModusLink.
Innovate, innovate, innovate and please be strategic! Look, the supply chain of the future is here, right this way! Don’t believe me? Just walk down to the basement and over 100 supply chain providers will try to make a compelling case that they are blazing a trail unlike any other vendor has ever done.
There seems to be three different reports and analysis on the “State of the 3PL Industry.” Some common themes:
Shippers want innovation but only believe that 3PLs are capable of being innovative less than 30% of the time.
Shippers want 3PLs to be proactive and deliver strategic solutions, but believe this happening at the same rate of around 30%.
Last, but not least, 3PL CEO’s believe that attracting and retaining top talent is the number one inhibitor of growth and success in the 3PL space.
In looking at the CSCMP conference guide for 2012 in Atlanta last week, I was struck by the notion that if I looked back several years at prior guides and removed the dates from the cover, anyone would be hard-pressed to see significant difference between what was being discussed and the vendors doing the discussing.
To succeed in this commoditized space, 3PLs must think strategically and deliver true innovation to their customers or they will fail to grow. A few providers in my mind have delivered unique and beneficial services and thus dominate their space. MecuryGate has developed an affordable web-based multimodal transportation management system (TMS) that now has over 270 customers. They are pulling away from the pack of other TMS vendors to become the market leader in less than 5 years. CH Robinson has now eclipsed $10B in revenue with a simple model based on they will move all of your freight at a competitive price and combine it with world-class visibility. US Bank has developed the largest network of carriers in their space and is able to audit and pay your freight quicker and at a lower cost than any other vendor and at the same time offer the protection and security of one of the largest banks in the world.
Lastly, Amazon is one of the largest retailers in the world with arguably the best fulfillment system in place. Combine this with a growing network of fully automated 1mm+ square foot warehouses strategically placed all over North America and you have the recipe for domination. If they can figure it out, and I believe they will, they are going to be a dominant 3PL in the years to come. How do you compete with a value prop that says, “Give me your product and I manage everything from VMI all the way to ultimate delivery for 10%?” Someone asked if they had bigger plans for the automotive logistics space and the Amazon rep just smiled and said, “Stay tuned.” Can you say service and aftermarket parts?
These three companies in my view all have top-notch talent who all seem to be very satisfied with their jobs and employer. Conversely, I counted 6 recruiting companies who had exhibit booths. The most I have ever seen! They all said that business was booming. I also noticed that a lot of booths lacked staff—certainly not the best image! (Might they be off talking to all those recruiters?) To bring this full circle, I believe the message here is most supply chain providers are not innovating and thinking strategically and thus are not able to attract and retain the talent that is required to do so. Those that are developing unique services and solutions clearly have an energized talent pool. It’s a great time to be a supply chain recruiter in this environment, but even better, it’s a great time to be thinking outside the cardboard box and finding new supply chain solutions for our clients.