FEATURE 3PL
BENEFITS AND CHALLENGES L
ogistics outsourcing is an important strategic option for companies across a broad range of industries. Third party logistics (3PL) - the outsourcing of logistics and supply chain operations - is now a massive worldwide business with an annual turnover estimated as approaching $750 billion. This is a sector with major well
established companies, including Unipart Logistics, DHL, Clipper and Ceva with real expertise and a proven ability to reduce costs and improve levels of service. The sector continues to grow with the
obvious reason around this being the growth of e-commerce. A number of companies who offshored their manufacturing are now reshoring back to the UK but outsourcing their logistics operations when they do rather than establishing their own. The growth of omni-channel distribution is an additional factor. Many companies expanding their business model to include retail store and direct customer fulfillment are finding such a dual operating model challenging so often turn to 3PL providers to facilitate this part of the equation.
RETURN TO SENDER A key part of today’s e-commence market is returns. It’s vital to have an efficient delivery service but equally as important to customers is an effective
returns operation – and of course it’s important to suppliers to get products repacked and back on the shelves. Recent research* shows that online
shoppers estimate they would return nearly a third (31%) of their purchases with 39% saying they have returned items bought online in 2014. Although retailers have significantly
improved their returns processes in recent years the overall convenience of the service remains behind customers’ expectations with 27% saying they are deterred from ordering something online because they don’t want the trouble of returning it if it isn’t right. However, 3PL providers are about much
more than delivery and returns. Companies such as Unipart Logistics can manage the whole supply chain and logistics operation and offer supply chain design, warehouse and facility design, forecasting and demand planning (to help meet the huge peaks and troughs caused by events such as Black Friday and Cyber Monday) and materials management to ensure optimum stock control. “We design, operate and optimise
complex supply chains for clients across a wide range of sectors on a local and global basis,” comments Bernard Molloy, global industrial logistics director, Unipart Logistics, exhibiting at IMHX 2016. “Our understanding of complex supply chains means we can design and
LOGISTICS BUSINESS TO INCREASE PRESENCE IN 3PL
A Bedfordshire logistics firm has invested more than £3 million to expand its warehousing offering for a pending contract and to provide overflow space for other storage sites experiencing high volume growth. Miniclipper Logistics provides transport and warehousing services to sectors including print, retail and industrial. Operating almost at full capacity the company has
acquired new premises in nearby Houghton Regis to boost storage capacity by more than a quarter. The investment will see the creation of 30 jobs in
early 2015 including warehouse administrators and order pickers. The new site will allow Miniclipper to design a bespoke warehouse layout for a new client in the DIY sector as well as to quote for business. Currently other sites are at full capacity restricting their ability to enter tenders for large contracts. “The timing of this contract win was excellent and
coincided with a call from Travis Perkins seeking storage space locally so we were able to offer them an instant solution,” says managing director Peter Masters. “The increase in capacity will allow us to
S6 MARCH/APRIL 2015 | MATERIALS HANDLING & LOGISTICS
bid for new business in our existing core sectors and we are exploring some potential opportunities in the food and drink sector.” Miniclipper turned over £10 million in the year to
March 2014 and anticipates revenues of £11.5 million in the current period which it hopes to grow to £15 million within five years thanks to the increase in capacity. The new warehouse will enable it to store an extra 5,000 pallets and increase capacity by 51,000 sq ft. The company now has the opportunity to increase its presence in the 3PL market and the warehouse will be fundamental in allowing the company to achieve its full potential including creating jobs for local people. Miniclipper has an invoice discounting facility
with Lloyds Bank Commercial Finance which gives quick access to up to 90% of the value of issued invoices, helping improved cashflow.
www.lloydsbankinggroup.com Enter 301
www.imhx.biz / MATERIALSHANDLINGLOGISTICS
deliver resilient solutions that deliver exactly what the customer needs while ensuring they retain strategic control.”
MIND THE GAP An increasingly important part of delivering this kind of total ‘joined up’ logistics and supply chain solutions is the use of IT. However researchers have identified the ‘IT gap’ between expectations around the IT abilities of 3PL providers and the satisfaction of users. In the 2014 Third Party Logistics Study** 98% of users of 3PL services said that IT capabilities are a necessary element of 3PL expertise. However only 55% of the same users said they were actually satisfied with their providers’ expertise. In response to the growing importance of IT in logistics IMHX 2016 will feature a dedicated Supply Chain IT Village where providers will help visitors meet these challenges and discover the latest e-commerce solutions.
GETTING THE BEST FROM 3PL On the broader front there will be a United Kingdom Warehousing Association (UKWA) 3PL Pavilion. “With over 650 member companies
UKWA is the leading trade association dedicated to the third party logistics sector,” explains CEO Peter Ward. “Our Pavilion will showcase the products and services offered by our members and how the thousands of visitors can get the best from 3PL.” Of course 3PL isn’t the solution to every
problem. There can be concerns over the expertise of some 3PL providers and of loss of direct control of deliveries – and of course when choosing to outsource logistics operations there is the issue of the transfer of existing staff. However 3PL remains a cost effective option for many. Users of 3PL services questioned in the Third Party Logistics Study reported an average reduction in their logistics cost of 11% and an average reduction in their fixed logistics costs of 23% – which are savings well worth having.
*Conducted by CollectPlus a joint venture between the PayPoint retail payment network and parcel carrier Yodel. **The 2014 Third Party Logistics Study – The State of Logistics Outsourcing (Capgemini).
Heading up IMHX 2016 and with a wealth of experience gained from working with providers of materials handling and logistics services, Rob Fisher examines some of the issues
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48