Interview: John C. Langley Shares Views on 3PL Marketplace
Amazon is changing the 3PL landscape in at least a couple of significant ways.
Latest NewsThird Party Risk: Too Close for Comfort The State of the DC Voice Market DHL launches Global Trade Barometer Get the lay of the land with Modex 2018 show map Breaking Through On Yard Visibility More News
Latest ResourceThird Party Risk: Too Close for Comfort You’ve got a handle on many of the potential supply chain "disrupters" that can paralyze your business. But the real risk is embedded in areas you may have overlooked.
The 3PL arena is booming. But what does that mean for today’s supply chain manager. C. John Langley Jr., Ph.D., who serves as a director of development at the Center for Supply Chain Research at the Smeal College of Business at Pennsylvania State University shares his views in this interview.
Supply Chain Management Review: How do 3PLs create more value?
John Langley: 3PLs create value by providing basic, value-added, and innovative services needed by their clients and customers. As potential customers are becoming better and better at understanding their own supply chain core competencies, this will continue to be reflected in increased business opportunities for 3PLs and 4PLs.
SCMR: How has Amazon changed the 3PL landscape? Are there now lower barriers of entry?
Langley: Amazon is changing the 3PL landscape in at least a couple of significant ways. First, and as a 3PL customer, Amazon has asked its external providers of supply chain services for a needed mix of operations- and solutions-based services. Second, considering the extraordinary range of resources available at Amazon, they also need to be recognized as a very viable potential provider of commercial logistics services. Considering some of the unique, solutions-based supply chain needs evidenced at Amazon, there are a range of strategic decisions that they may contemplate in the future. Considering the results of our current research into the use of 3PL/4PL services, the range of capabilities that are necessary to have is increasing significantly. Thus, the barriers to entry actually are increasing rather than diminishing.
SCMR: What changes in information technology are expected?
Langley: Based on the research we have conducted, shippers are asking their 3PLs and 4PLs for competency in a wide range of IT-based services. In fact, the availability of capable IT-based services already has become a key differentiating factor for commercial providers of 3PL and 4PL services. Among the types of IT-based services that are growing in popularity are supply chain visibility; execution-based capabilities; meaningful use of descriptive, predictive, and prescriptive analytics; and integration technologies.
SCMR: Are we seeing new patterns in consumerism?
Langley: It will be interesting to observe how all of this evolves, as clearly there are examples of consumerism to which the 3PL sector is busy responding. The current emphasis on omni-channel capabilities, for example, is in response to customer and consumer needs for more highly-innovative and effective supply chain services. As this pattern continues, we will see growth in the use of effective and innovative social media capabilities to facilitate the planning and functioning of supply chains.
SCMR: Will E-commerce gain or lose traction this year?
Langley: Most likely, the coming year will show increases in the diffusion of e-Commerce services. This is a very interesting area, and one that will continue to develop and evolve. Even though there are a wide range of significant players who are involved in e-Commerce, we continue to search for effective operational and strategic approaches to facilitate the needs of e-Commerce.
SCMR: Should we expect to see more near-shoring and cross-border trade?
Langley: This is a tough one, as any answer to this question would need to assess the net impact of global and political trends on a worldwide basis. There are good arguments for the growth of near-shoring, as well as the alternative of cross-border trade. Another major factor regarding this topic will be the extent to which supply chain participants ramp up their abilities to understand and utilize the principles relating to total landed cost. Use of this approach will help to make more rational sourcing, manufacturing, and marketing decisions, and then the next bridge to cross will be what future directions will become evident in terms of the forces impacting our supply chains.
SCMR: Finallly, where do we see the greatest regional variance in manufacturing and production?
Langley: This is a challenging question, as the range of answers depends not only on global import and export trends, but also how much is manufactured and produced for local consumption. Big question marks include: how much of global imports and exports are impacted by near-shoring vs. offshoring trends; and how will manufacturing and production for local consumption impact regional variances.
About the AuthorPatrick Burnson, Executive Editor Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
Subscribe to Supply Chain Management Review Magazine!Subscribe today. Don't Miss Out!
Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!
Transportation Trends: The last mile, history repeating Economic Outlook: A Complex and Uneven Scenario for Global Supply Chains View More From this Issue