Purchasing Magazine just published a new article featuring 5 tips on how to select logistics software which is definitely worth taking a look at.

Selecting logistics software is typically a massive capital expenditure so it is imperative that you research each package’s offerings from every angle. If this isn’t a core competency consider hiring a technologically savvy logistics consultant or utilizing the services of a 3PL that already has software in place in lieu of your company making the purchase. [Read more…]

2/3 of domestic U.S. Fortune 500 companies now use third party logistics companies to assist and manage their logistics and supply chain functions in some capacity according to a Nov 2006 study performed by Armstrong & Associates.

Armstrong which maintains an extensive database of 2,864 3PL customer relationships develops an annual report to provide insight into trends and changes in the 3PL, logistics outsourcing industry.

Another trend is large companies utilizing multiple 3PL providers to manage their supply chain. General Motors, Wal-Mart, DaimlerChrysler, and Ford Motor each use 30 or more logistics providers, which shows that larger companies are utilizing the services of many 3PLs rather than specifically using one global provider.

Armstrong estimates that the Fortune 500 3PL market was worth $158.1 billion in 2005.

The 3 primary logistics services outsourced in 05 include:

1. Transportation Management at 20.5%
2. Warehousing at 19.3%
3. Value-Added Services at 18.5%

Source: Third Party Logistics Customer Report 2006

Every once in a while I come across new logistics blogs that are worth noting and sharing with everyone. Here are a few written by supply chain and 3PL professionals that I’ve come across lately.

SCM Pulse
Great Suppy Chain Management blog written by Rick Ankrum an SCM professional with over 30 years of experience in procurement, supply chain management and strategic sourcing. This site features news, resources and commentary about supply chain management and logistics industries.

Riskape Supply Chain Management Blog
A blog designed to cover the issues of risk in the supply chain written by Rob Parrish of Tarratine Associates. A good resource for supply chain managers in their effort to mitigate risk in their global sourcing and supply chain efforts, this is definitely worth a look.

At Supply Chain Management
A supply chain management blog by Chris Abraham a SCM consultant based out of Green Bay, WI. The blog recently launched a new site design and provides in depth features on supply chain management and logistics trend analysis.

Here is my first list of Logistics Blogs

A new logistics directory has recently been launched called Logistics Locator. Unlike this site which is more of a news/article based site, Logistics Locator is more along the lines of a traditional submission based directory for third party logistics and warehousing & distribution companies. The hope is to create a high quality source of 3PL, trucking, and logistics companies culled from submissions from logistics professionals and respected companies and organizations in the logistics industry.

For a limited time the site is offering free submissions to relevant, high quality sites who link back to the site.

Feel free to check it out at http://www.logisticslocator.com

Cutting costs out of the supply chain is one of the biggest challenges facing logistics professionals today.

3PLwire recently reported on a great article by Linda Taylor of Fedex Services on finding “hidden savings in your supply chain.”

An individual at Wikipedia asked the following question recently and I thought this would be a good opportunity to clear things up for those who are unfamiliar with the landscape of the 3PL industry:

“If an organization is a Third Party Logistics provider, who is the First and Second party?”

1st Party: The Supplier
2nd Party: The Company buying the product that is being stored or shipped
3rd Party Logistics Provider (3PL): The company that provides warehousing and transportation outsourcing.
4th Party Logistics Provider (4PL): The majority of people would agree that 4PL is little more than logistics consultant speak, but nevertheless here is the official definition courtesy of Accenture:
“A 4PL is an integrator that assembles the resources, capabilities, and technology of its own organization and other organizations to design, build and run comprehensive supply chain solutions.”

Here are the latest logistics job openings available from the logistics job board

Logistics Manager

Director of Logistics

Operations Manager

Fleet Manager

Traffic Manager

Local Drivers

OTR Drivers

Ask one person they’ll tell you one thing, ask another they’ll feel the exact opposite.

Do 3PL mergers have a positive or negative reaction on service to outsourced logistics clients? Here are two different articles, from two different logistics publications, with two different stances.

Logistics Today
Logistics Mergers Don’t Help Customers

Global Logistics and Supply Chain Strategies
Consolidating 3PLs Benefits Customers

While RFPs can be a great way to gather additional information on logistics companies and receive competitive bids from a number of companies, they can also have the potential to become a colossal waste of resources for both your company and the 3PL providers participating. In fact some logistics companies will not even participate in exhaustive RFPs; this is particularly true for companies that are known for issuing yearly benchmarking exercises.

If you are going to issue an RFP consider limiting the distribution to only 3-5 companies. By doing extensive preliminary research select which providers will fit your needs and then consider issuing a succinct Request for Quote to these select companies. Need to find out more information on companies? Review their website, visit trade magazine sites and directories and then contact the companies electronically or give a business development or sales rep at each company a call to really understand each logistics providers strengths and unique service offerings.

Before making those initial contacts make sure you understand your program inside/out and in great detail. Every company is different so it’s important to give your 3PL a good idea of what your program looks like and how it runs. Usually the more information you can provide the better the rates will be because it limits the amount of assumptions that need to be made in the engineering/pricing process. Here are a number of things that 3PL providers would typically like to know that will enable them to generate a proper quote.

• Product(s) Description
• Average Monthly Inventory: # of pallets/skids/rolls; # of cases
• Average case weight
• Average cases per pallet
• Average SKUs in inventory
• Product Stackability
• Pallet Dimensions
• # of inbounds received per year
• # of outbound orders per year
• Are the shipments coming in on rail, truck, LTL small parcel?
• Locations/Lanes for shipments/pickups
• Technology requirements: EDI, RF Scanning, RFID?

It seems like every month you hear about another major 3PL merger or acquisition; strengthening or creating yet another massive 300 pound Gorilla, supply chain management conglomerate. But according to Michael Stolarczyk, a business development director at Exel Logistics, small to mid-market regional logistics providers are still viable and very much in demand.

Some clients outsourcing logistics services to 3PL providers feel that they can get better results by using one or even a number of different niche logistics companies. With smaller logistics providers some customers feel that they get more specialized attention and have access to top management figures that aren’t always as accessible when working with the big guys.

There are also other great advantages to working with a “lean, mean” third party logistics provider that focuses on a few regions for it’s public warehousing and transportation offerings. These include working with companies that specialize in servicing your particular industry, product or lane segment.

It is important to assess your company’s needs before making a decision what type of 3PL to outsource your services to. While a smaller or medium sized provider might be perfect for one company a large global provider may be the right fit for another. Be sure to use due dilligence when evaluating your needs.

3PLwire also has a good write up on the use of small/medium sized 3PLs : part 1, part 2

source: Niche Logistics Companies Play Important Role