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Logistics is a vital part of the manufacturing process and increasingly manufacturers are outsourcing much of this process to third party logistics firms (3PL). The 3PL market itself is highly competitive and any competitive differentiator is critically important. This brief looks at whether technological innovation may be the key. Scope Identifies ways through which ICT providers can help 3PLs both gain and retain customers by creating an advantage over a competitor. Estimates the global 3PL ICT spend from 2004 to 2007. Understand why your 3PL customers must develop effective risk mitigation plans to reduce the risk of business disruption through system failure. Highlights According to an interview with Charles Kirk, CIO of GeoLogistics, a $1.5bn 3PL, ICT spend in the sector overall represents around 1-2% of total revenues. In Datamonitor's "European Logistics Benchmarking 2003" report, the average margin achieved in 2001 of the 18 leading 3PLs profiled was 4.1%. By 2002, the average had slipped to 3.5%. Clearly, in order to compete successfully and yet remain profitable, 3PLs must keep costs low and pass these savings on to customers in the form of better prices. Datamonitor expects that RFID will be the bedrock of most supply chains 10 to 20 years from now with the market conservatively valued at $1 billion by 2006. Because of the importance of an efficient supply chain across all logistics operations, Datamonitor believes that RFID could be an important technology in this market as well. Reasons to Purchase Highlights ways in which ICT providers can help 3PLs gain and maintain a competitive edge, and ways in which ICT acts as a competitive differentiator. Comments on technologies 3PLs can utilise for tighter integration with their client's systems. |
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