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Sales and Fulfillment

How data analytics is delivering a competitive edge to 3PL service providers

The findings of a recent survey conducted with over 400 professionals revealed that:

  • About 58% of shipping companies have seen up to 25% reduction in the supply chain, and 60% 3PL service providers believe that the ‘Amazon effect’ has had a disruptive effect on the supply chain.
  • Post COVID-19, both shippers and 3PL service providers aim to do better risk management and continuity planning in the areas that need strengthening.
  • Both 3PL service providers and shippers expect to move from transactional relationships to strategic partnerships with each other.

With these findings in mind, let’s examine how data analytics in 3PL will help 3PL service providers boost and optimise supply chain operations.


Why data analytics is important for 3PL service providers ?

Today, data delivers competitive advantage, and analysing this data is a prerequisite to a successful business. With an increase in last-mile services, those 3PL service providers who invest in logistical and data analytics efficiently evolve to manage the changes in the global supply chain market. This allows them to transform their business processes to sense, learn, respond, and evolve like a living organism. Increased analytics in logistics leads to:

  • Increased competitive advantage:

    Having access to relevant data empowers 3PL logistics outsourcing service providers to utilise their assets better, reduce costs, and add value to their service to shippers, thereby strengthening their relationship.
  • Predictive and proactive management of supply chain assets:

    Analysing data helps 3PL service providers define what that data means for them and how they can take a proactive approach to the insights generated. It boosts effective decision-making regarding freight tenders, carrier selection, and other logistics service provider (LSP) partnerships.
  • Reduced transportation costs:

    3PL service providers can collect and centralise data from supply chain processes into a dashboard for a holistic understanding of various business touchpoints. This helps uncover KPIs such as cost per unit, lead times, cost per truck, and cheapest routes.
  • Increased operational efficiency:

    Getting a data-centric inventory management strategy helps 3PL service providers track each phase of the cycle. Tracking KPIs such as order time to fill, operation capacity, and storage type utilisation helps in identifying scope for improvement.
  • Decrease in cost to serve without impacting customer satisfaction:

    The cost-to-serve metric helps identify areas of inefficiencies and non-profitable customers and business units as well as in implementing general operational improvements.

Investing in a data vault helps drive better decisions. Structured data in vaults makes it easier to build a data warehouse, add new data sources, and update business rules without interrupting access to data. It also allows parallel loading and saves historic data for advanced analytics.  The future of 3PL service providers is in Live Enterprise wherein networked and connected processes interact with each other as well as provide 360-degree visibility to actionable data insights. It helps them to drive robust growth and enables real-time decision-making remotely.


How data analytics is helping improve 3PL service provider’s performance and service

Supple chains, in general, are chaotic and constantly changing. A data-driven approach helps 3PL service providers remain flexible by analysing financial and operational metrics and offering the best shipping experience. By developing data science teams, 3PL service providers will be able to convert data to valuable insights. These insights will help in:

  • End-to-end supply chain visibility:

  • Collecting and utilising big data delivers real end-to-end supply chain visibility by optimising resource utilisation, process quality, and performance to increase the speed and transparency of making decisions.
  • Improved resource planning:

  • Using historical data determines the clients’ future volumes and helps plan resources and capacity accordingly.

  • Adjusting inventory levels as per need:

    Seasonality, availability of labour, marketing and advertising promotions, and weather can affect the time it takes for order delivery. Analytics can help collect enough data and identify patterns to adjust the inventory based on these factors.
  • Cost savings:

    Getting useful data insights identifies revenue leakage and helps make the right decisions to reduce fulfilment costs.


The future of 3PL data analytics

After the COVID-19 pandemic, while many 3PL service providers faced unprecedented challenges, others that could provide e-commerce fulfilment thrived. About 62% of 3PL warehouses emphasised the importance of data and analytics. To remain competitive and thrive, 3PL service providers need valuable analytics to improve operations and ROI. Analytics in logistics can be in the form of:

  • Disruption mitigation
  • Fuel management
  • Route optimisation
  • Intermodal transport optimisation
  • Process automation
  • Shipment tracking
  • Vehicle maintenance
  • Reducing delays
  • Choosing the right carriers
  • Managing returns


How Infosys BPM can help ?

At Infosys BPM, we aim to create and deploy logistics management services that address a wide range of challenges mentioned above. Our analytics services include:

  • Business KPI dashboard (cost, service, and compliance)
  • Service-level agreement (SLA) tracking and reporting
  • MIS reporting
  • Customer-specific reporting
  • Fuel analytics
  • Carbon footprint analysis

For more information on our range of BPM services for 3PL providers, click here.


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