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The State of Logistics Outsourcing

2008 Third-Party Logistics

Copyright 2008 C. John Langley Jr., Ph.D. and Capgemini U.S. LLC. All rights reserved.

Results and Findings of the 13th Annual Study

2Copyright 2008 C. John Langley Jr., Ph.D. and Capgemini U.S. LLC. All rights reserved.

The 2008 13th Annual 3PL Study Focuses Attention on Topics of Current Importance

CUSTOMER STUDY• E-mail survey – 1,644 global respondents

• Focus interviews with key industry executives

• Facilitated workshop session at Capgemini Accelerated Solutions Environment – Berlin, Germany


The 2008 13th Annual 3PL Study Focuses Attention on Topics of Current Importance

CUSTOMER STUDY• E-mail survey – 1,644 global respondents

• Focus interviews with key industry executives

• Facilitated workshop session at Capgemini Accelerated Solutions Environment – Berlin, Germany

Investigate Topics of Contemporary Interest• Integrated services

• Green supply chain 2008 Special Topics

• Supply chain security

Current State of the 3PL Market

Most Customers are Satisfied, But Improvement Opportunities Continue to Exist



Customers Report a Number of Continuing Problems with 3PL Providers

TOP SEVEN Continuing Problems Cited by 3PL UsersAll

Regions

Service level commitments not realized 51%

Lack of continuous, ongoing improvements and achievements in offerings

42

Information technology capabilities not sufficient 39

Cost reductions not realized 36

Lack of project management skills 35

Ineffective management of key performance indicators (KPIs) 34

Unsatisfactory transition during implementation stage 30


The IT Expectation/Performance Gap Continues…

Expectation/Performance Gap

Integrated Logistics

Managing Systems and Services for Best Results


DrawbacksBenefits


3PL Users Indicate Benefits and Drawbacks From the Use of “Integrated” Logistics Services

• Ease of managing outsourced services

• Focus on core business

• Improved efficiency and effectiveness

• Greater flexibility

• Reductions in number of logistics providers

• Enhanced shipment visibility

• Quicker response

• Custom solutions, and more complex solutions

• Inventory reduction

• Pro-active IT approach

• Service quality concerns

• More expensive to use external provider

• Service and systems integration are among our core competencies

• Proprietary IT capabilities are more flexible and user-friendly

• Issues with dependence on external party

Green Supply Chain

It’s Not Whether to Act, It’s How



3PLs are Uniquely Positioned to Help Customers Plan and Execute Green Supply Chain Initiatives

Educate customer regarding green supply chain and sustainability

Leverage meaningful case studies

Provide simple diagnostic tools / maturity model

Step 1Education

Step 1Education

Step 2PlanningStep 2

PlanningStep 3

ExecutionStep 3

Execution

Measure customer’s carbon footprint

Identify change levers to reduce GHG emissions

Support business case development

Develop implementation plan

Implement green supply chain

Consolidate shipments and optimize routing

Leverage green vehicles and distribution centers

Facilitate reverse logistics for recyclables

Consultants3PLs

Green Focused 3PLs

Supply Chain Security

Concerns Rise as Regulations, Risks Mount


Level of Security All Regions

Very secure 16%

Secure 60%

Somewhat secure 22%

Not secure 2%


The Majority of 3PL Users Are Satisfied with the Security Provided by their 3PL

Most Serious Concerns Over Supply Chain Security Issues

All Regions

Theft of material goods (74%)

Natural disaster disrupting supply chain (33%)

Tampering with material goods (32%)

Theft of intellectual capital (26%)

Other materials smuggled within your shipments (19%)

Terrorist attack disrupting supply chain activities (17%)


But They Still Have Security Concerns

The State of Logistics Outsourcing

2008 Third-Party Logistics

Copyright 2008 C. John Langley Jr., Ph.D. and Capgemini U.S. LLC. All rights reserved.

Results and Findings of the 13th Annual Study

Visit http://3plstudy.com