BUILDING RESILIENCY IN THE SUPPLY CHAIN THROUGH 3PLS
By Luis Emilio Fernandez de Jauregui.
The spread of the COVID-19 pandemic has deeply disrupted the global supply chain and its full effects are yet to be realized.
According to a report published by the Shipping and Freight Resource on April 21, 2020 (Manaadiar, 2020) , where over 300 Shipping and Freight professionals across the world collected and analyzed data on Impact, Preparedness, and Recovery, 59.2% of responders indicated their operations were significantly affected and up to 89% indicated they were either somewhat prepared or not prepared at all to face situations like the one we are experiencing. In this report 67.6% of the survey takers indicated they will invest in technology to increase the adaptability of the industry to supply chain disruptions.
The need to increase the capabilities of the current supply chain technology becomes a key strategy to increase its resiliency. In order to quickly develop these capabilities, companies have decided to consider 3PL service providers that bring know-how, efficiencies and technology specialized in the movement, storage and fulfillment of customer’s orders.
Many 3PL service providers are deploying technical tools that increase the visibility, flexibility, collaboration and accuracy of the processes they serve (Inbound Logistics, 2020). These include collaborative robots, drones, autonomous delivery pods and wearable, all of which assist human workers by increasing their efficiency while handling jobs such as picking and packing, product movement, or shipping and receiving. These technologies help during a pandemic by reducing the human contact needed by warehouse workers to fulfill their tasks.
Equally as important is the software used by 3PL warehouses that enable their clients to have visibility in real time and allows them to make decisions that lessen the impact of unexpected situations. Say a client learns a shipment will be delayed by several weeks, so it instead secures air capacity, albeit at a higher cost. By connecting the systems so information can flow between them, management can use advanced analytics to better understand the impact on costs, inventory, and sales and operations planning. This insight can improve operations and provide a better experience for clients.
Technology will be key for both 3PLs and shippers, as they emerge from the COVID-19 pandemic and in the longer-term. Shippers that have access to the technology needed to quickly handle growing volumes will be better positioned to support clients.
The value propositions all 3PLs can offer has grown thanks to investments in technology that allows them to collaborate and communicate with partners throughout the supply chain—a key factor in realizing efficiencies and adapting to change.