The third-party logistics (3PL) business is tough, because it covers a wide gamut of service offerings, that include some combination of:
- Just move my boxes and/or pallets
- Move my boxes and/or pallets and store them in your warehouse
- Move my boxes and/or pallets and operate my facility
- Own all the labor and activities in my facility
- Offer all distribution services for my product (All I will do is download my orders into your system/supply chain)
I’ve even run into more complicated models of operation, including both tightly and loosely coupled models. In a tightly-coupled model, the supply chain systems of the 3PL, including orders, inventory, transportation, advanced shipment notices, purchase orders, and more, are tightly integrated into the shipper’s supply chain systems. All this information seamlessly flows between both supply chain systems of the 3PL and the shipper. They stay in synch with each other and the parties perform the functions in their respective systems.
In a loosely-coupled model, no such tight system integration exists. The 3PL personnel have access to the shipper’s supply chain systems because they are operating a shipper’s facility. There is no system integration whatsoever. However, 3PL personnel are trained to log into the shipper’s systems and are can do just about any function. The 3PL owns everything in execution including labor and accountable for the labor costs.
No matter what model is chosen, flexibility is key to winning and keeping business. An inability to integrate with shipper’s systems or support the shipper’s systems could mean losing multiyear 3PL contracts. Particularly with the sunset of Windows CE, which begins this year, a flexible mobile supply chain platform is invaluable. In the past, Windows CE was the default system offered for the mobile computers, scan guns, and wrist mounted devices from Microsoft. I believe that Windows CE is one of the most clunky, least user friendly, and least customizable platform available. It became even more clear to the industry when Steve Jobs demonstrated what was possible in such a small form factor with the iPhone and the super-easy-to-use UI/UX.
For enterprises, Android is emerging as a very good alternative. With this OS, flexibility can be taken to another level in a variety of ways compared to the Apple platform:
- The Android platform is open, compared to Apple’s severe restrictions.
- The powerful Android Mobile Supply Chain Platform makes adding capabilities is as simple as adding another app. Possible extensions include Telnet emulation, voice-enabling a warehouse management system (WMS), image-enabling the supply chain, learning management systems (LMS), smart glasses integration, or an indoor positioning system.
- Android allows for the quick addition of language support to support a wider variety of workers.
The possibilities are endless.
We just finished a call with a multi-billion dollar 3PL, and these guys were very clear that they don’t want to just move boxes and participate in a transactional relationship that competes via a lower cost model. Instead, they wanted a partner to offer high value trusted advisory services delivering ROI and leveraging innovation. For this customer, systemic flexibility is an important asset because while bidding for contracts, they can confidently say that they can make any system work with their supply chain infrastructure.
If you really think about it, that’s all any CIO really wants. The good news is truly flexible supply chain systems is coming. How flexible is your mobile supply chain platform? How would that make your life easier? Let us know your thoughts in the comments section below.