Close connections with your 3PLs—and the inventory they manage—is more critical than ever in the age of omnichannel retailing, e-commerce, and fast cycle times.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Businesses of all sorts entrust third-party logistics service providers (3PLs) with much of their inventory for a host of reasons. It can help them extend their geographic reach into new markets. It keeps brick and mortar off the balance sheet. Third parties can provide specialized services and technologies that it makes no sense to develop in house. They can give clients the flexibility to scale up or down as business requirements shift.
Today, outsourcing may make more sense than ever. "When you look at the speed of change and the level of uncertainty, specifically when you look at things like omnichannel and e-commerce, growth rates are hard to predict. Leveraging 3PLs makes sense," says Mark Wheeler, director of supply chain solutions - North America for Motorola Solutions, which provides bar-code scanners, mobile computers, and other communications equipment and technology.
That same emphasis on speed, though, means that fast and accurate communication between 3PLs and the customer is crucial.
Bruce Stubbs, director of industry marketing for distribution at Honeywell, which supplies a variety of data capture technologies, adds, "As omnichannel becomes more prevalent, that's driving a lot of pressure in the DC environment. A lot of distribution networks can handle delivery to the box stores. But there are many people who don't have the internal expertise or right infrastructure to handle omnichannel. It takes a different type of operation for picking, packing, and shipping direct to consumer. We've seen a lot of people take that portion of their operations as they move into the multichannel arena and give it to a 3PL."
Those same challenges make close integration between customer and 3PL systems imperative. "When you are operating that much faster and going to direct-to-consumer fulfillment, you have to look at how you handle that integration," Wheeler says.
A WINDOW ON THE SUPPLY CHAIN
Yet despite decades of development of track and trace tools, getting good visibility into inventory that's in the hands of a third party can still be a challenge. "Visibility and control is an area that both parties continue to struggle with," says Adrian Gonzalez, president of Adelante SCM, a research firm that specializes in third-party logistics.
The ideal for a shipper who owns the goods, Gonzalez says, is to have systems that make it appear as if he is managing it himself—having all your goods in a single view. But that's easier said than done, Gonzalez acknowledges. "And the more 3PLs you have, the more of a challenge it becomes. You have multiple relationships to manage, multiple systems to integrate with."
These days, it's pretty common for shippers to be working with multiple providers, according to Gonzalez. For most companies, using a single 3PL for all outsourced operations isn't realistic, he explains. "For years, they have tried to consolidate as much as they can, but at the end of the day, it's like technology—you go with the best of breed."
The question of how many 3PL partners a shipper might have aside, the fact remains that working with one of more 3PLs adds a level of complexity to tracking and managing your goods. So what can shippers do to make the process as seamless as possible?
Gonzalez says there are three key considerations. The first is the technical aspect—the integration of 3PL systems with the customer's internal systems.
"Another element is getting alignment around the key metrics that will be guideposts for making sure on a day-to-day basis, you are moving in the direction you need to be moving in," Gonzalez says. "And those metrics will change over time. The main thing is, you don't want to drown in data. You want to focus a relationship on a core set of metrics aligned with the desired outcomes.
"The third thing is the reality that at the end of the day, it is people that get things done," he adds. "You cannot underestimate the influence of people-to-people relationships."
OUT OF MANY, ONE VIEW
Of those three considerations, historically, it's been that first aspect—the technology—that has proved to be the biggest hurdle, creating problems on both sides. For 3PLs, working with multiple customers once meant employing multiple warehouse management systems (WMS) and transportation management systems (TMS). "We've seen a migration away from that," Gonzalez says. Many 3PLs have developed standard platforms to serve all their customers, making the technology more scalable and manageable.
For businesses making use of multiple 3PLs, the issue can be fragmentation of data. That very real problem leads some companies to assign a lead logistics provider to consolidate and orchestrate information flowing to and from all third parties. But not every company has the resources to do that. "More commonly, the onus is on the shipper to have a technology platform that is able to take information from across trading partners and aggregate the data," Gonzalez says. "The challenge becomes aggregating the data from different sources and making sure it is accurate, timely, and complete. The objective is to have a single view of the supply chain."
The technology to enable that has improved steadily. Stubbs says visibility between the 3PLs and the owners of the inventory can come via linking inventory in the 3PL's possession directly into the customer's WMS, or if the 3PL has a robust enough WMS itself, giving each customer access to its own data through secure nodes in that system. He says several WMS providers specialize in the 3PL market just to provide that kind of visibility.
Best-practice 3PLs, he says, work off advance ship notices (ASNs), which provide information from the client's suppliers on what's actually coming—which may not match what was ordered. "As soon as the ASN is sent by the supplier, it becomes visible to all in the WMS system. It becomes visible to the 3PL, and at the same time, becomes visible to the client. It is all about visibility and having real-time information to act upon."
Of course, the information in any system is only as good as the information provided, and that's where the tools for capturing information as goods move from the yard to receiving to putaway to picking to shipping are so critical. As Stubbs says, "Certainly, you need to be able to capture information not only accurately but in real time and present it to the system of record to provide real-time visibility to balance on hand, shipment status, receipt status, those types of things. That's critical to managing the separate inventory buckets. The way to do that is through electronic capture, whether that be through mobile computing, scanning, or voice. Typically, it's a combination of all of those."
BETTER STANDARDS?
What's likely to make that work much more seamlessly in the future is the use of data capture standards that can provide end-to-end traceability. The development of such standards, at least in theory, would have all parties in a supply chain working with the same sets of data. The goal, Wheeler says, is to have one way of encoding product for an industry that would allow anyone in the supply chain to scan and capture data. A single bar code could work from original source to final destination. "That will be a huge change that a lot of industries can use," he says. Producers and distributors of perishable foods are leading the way, driven by traceability requirements embedded in law. But more industries are certain to follow, Wheeler believes.
That sort of standardization has a ways to go before it sees widespread adoption. For one thing, Gonzalez says, standards are often that in name only, as companies adopt standards and then fine-tune them to their own needs. And Stubbs expects many companies will resist adopting standards, seeing the need to purchase systems and equipment to enable their use as a cost burden. He says widespread adoption of standards is likely to happen only as a result of pressure from either government regulations, as now exist for food shippers, or from big end customers such as Walmart, which is mandating compliance with food traceability initiatives by the end of June. "That should have a domino effect with other retailers," he says.
Greater adoption of technology like bar codes and radio-frequency identification (RFID) tags will also aid in capturing the data needed for tracking and tracing. A survey Motorola conducted last year among 3PLs, retailers, wholesalers, and manufacturers indicated that about two-thirds of goods inbound to distribution centers and plants carry bar codes today. The study projected that the number would rise to 83 percent by 2018. And RFID usage rates are expected to jump to 38 percent from the current 21 percent.
Wheeler expects pressure will mount on suppliers to tag goods as omnichannel and direct-to-consumer business models develop. "As you go to omnichannel and you want a single set of inventory, you almost have to be source tagged," he says. "You want to be able to do no-touch item-level receiving, no-touch order verification. That's somewhat forward looking, but it is definitely a trend."
Should that trend become reality, it promises to provide companies that use 3PLs with an even clearer, more timely view of just what's happening to their inventory.
Logistics real estate developer Prologis today named a new chief executive, saying the company’s current president, Dan Letter, will succeed CEO and co-founder Hamid Moghadam when he steps down in about a year.
After retiring on January 1, 2026, Moghadam will continue as San Francisco-based Prologis’ executive chairman, providing strategic guidance. According to the company, Moghadam co-founded Prologis’ predecessor, AMB Property Corporation, in 1983. Under his leadership, the company grew from a startup to a global leader, with a successful IPO in 1997 and its merger with ProLogis in 2011.
Letter has been with Prologis since 2004, and before being president served as global head of capital deployment, where he had responsibility for the company’s Investment Committee, deployment pipeline management, and multi-market portfolio acquisitions and dispositions.
Irving F. “Bud” Lyons, lead independent director for Prologis’ Board of Directors, said: “We are deeply grateful for Hamid’s transformative leadership. Hamid’s 40-plus-year tenure—starting as an entrepreneurial co-founder and evolving into the CEO of a major public company—is a rare achievement in today’s corporate world. We are confident that Dan is the right leader to guide Prologis in its next chapter, and this transition underscores the strength and continuity of our leadership team.”
The New York-based industrial artificial intelligence (AI) provider Augury has raised $75 million for its process optimization tools for manufacturers, in a deal that values the company at more than $1 billion, the firm said today.
According to Augury, its goal is deliver a new generation of AI solutions that provide the accuracy and reliability manufacturers need to make AI a trusted partner in every phase of the manufacturing process.
The “series F” venture capital round was led by Lightrock, with participation from several of Augury’s existing investors; Insight Partners, Eclipse, and Qumra Capital as well as Schneider Electric Ventures and Qualcomm Ventures. In addition to securing the new funding, Augury also said it has added Elan Greenberg as Chief Operating Officer.
“Augury is at the forefront of digitalizing equipment maintenance with AI-driven solutions that enhance cost efficiency, sustainability performance, and energy savings,” Ashish (Ash) Puri, Partner at Lightrock, said in a release. “Their predictive maintenance technology, boasting 99.9% failure detection accuracy and a 5-20x ROI when deployed at scale, significantly reduces downtime and energy consumption for its blue-chip clients globally, offering a compelling value proposition.”
The money supports the firm’s approach of "Hybrid Autonomous Mobile Robotics (Hybrid AMRs)," which integrate the intelligence of "Autonomous Mobile Robots (AMRs)" with the precision and structure of "Automated Guided Vehicles (AGVs)."
According to Anscer, it supports the acceleration to Industry 4.0 by ensuring that its autonomous solutions seamlessly integrate with customers’ existing infrastructures to help transform material handling and warehouse automation.
Leading the new U.S. office will be Mark Messina, who was named this week as Anscer’s Managing Director & CEO, Americas. He has been tasked with leading the firm’s expansion by bringing its automation solutions to industries such as manufacturing, logistics, retail, food & beverage, and third-party logistics (3PL).
Supply chains continue to deal with a growing volume of returns following the holiday peak season, and 2024 was no exception. Recent survey data from product information management technology company Akeneo showed that 65% of shoppers made holiday returns this year, with most reporting that their experience played a large role in their reason for doing so.
The survey—which included information from more than 1,000 U.S. consumers gathered in January—provides insight into the main reasons consumers return products, generational differences in return and online shopping behaviors, and the steadily growing influence that sustainability has on consumers.
Among the results, 62% of consumers said that having more accurate product information upfront would reduce their likelihood of making a return, and 59% said they had made a return specifically because the online product description was misleading or inaccurate.
And when it comes to making those returns, 65% of respondents said they would prefer to return in-store, if possible, followed by 22% who said they prefer to ship products back.
“This indicates that consumers are gravitating toward the most sustainable option by reducing additional shipping,” the survey authors said in a statement announcing the findings, adding that 68% of respondents said they are aware of the environmental impact of returns, and 39% said the environmental impact factors into their decision to make a return or exchange.
The authors also said that investing in the product experience and providing reliable product data can help brands reduce returns, increase loyalty, and provide the best customer experience possible alongside profitability.
When asked what products they return the most, 60% of respondents said clothing items. Sizing issues were the number one reason for those returns (58%) followed by conflicting or lack of customer reviews (35%). In addition, 34% cited misleading product images and 29% pointed to inaccurate product information online as reasons for returning items.
More than 60% of respondents said that having more reliable information would reduce the likelihood of making a return.
“Whether customers are shopping directly from a brand website or on the hundreds of e-commerce marketplaces available today [such as Amazon, Walmart, etc.] the product experience must remain consistent, complete and accurate to instill brand trust and loyalty,” the authors said.
When you get the chance to automate your distribution center, take it.
That's exactly what leaders at interior design house
Thibaut Design did when they relocated operations from two New Jersey distribution centers (DCs) into a single facility in Charlotte, North Carolina, in 2019. Moving to an "empty shell of a building," as Thibaut's Michael Fechter describes it, was the perfect time to switch from a manual picking system to an automated one—in this case, one that would be driven by voice-directed technology.
"We were 100% paper-based picking in New Jersey," Fechter, the company's vice president of distribution and technology, explained in a
case study published by Voxware last year. "We knew there was a need for automation, and when we moved to Charlotte, we wanted to implement that technology."
Fechter cites Voxware's promise of simple and easy integration, configuration, use, and training as some of the key reasons Thibaut's leaders chose the system. Since implementing the voice technology, the company has streamlined its fulfillment process and can onboard and cross-train warehouse employees in a fraction of the time it used to take back in New Jersey.
And the results speak for themselves.
"We've seen incredible gains [from a] productivity standpoint," Fechter reports. "A 50% increase from pre-implementation to today."
THE NEED FOR SPEED
Thibaut was founded in 1886 and is the oldest operating wallpaper company in the United States, according to Fechter. The company works with a global network of designers, shipping samples of wallpaper and fabrics around the world.
For the design house's warehouse associates, picking, packing, and shipping thousands of samples every day was a cumbersome, labor-intensive process—and one that was prone to inaccuracy. With its paper-based picking system, mispicks were common—Fechter cites a 2% to 5% mispick rate—which necessitated stationing an extra associate at each pack station to check that orders were accurate before they left the facility.
All that has changed since implementing Voxware's Voice Management Suite (VMS) at the Charlotte DC. The system automates the workflow and guides associates through the picking process via a headset, using voice commands. The hands-free, eyes-free solution allows workers to focus on locating and selecting the right item, with no paper-based lists to check or written instructions to follow.
Thibaut also uses the tech provider's analytics tool, VoxPilot, to monitor work progress, check orders, and keep track of incoming work—managers can see what orders are open, what's in process, and what's completed for the day, for example. And it uses VoxTempo, the system's natural language voice recognition (NLVR) solution, to streamline training. The intuitive app whittles training time down to minutes and gets associates up and working fast—and Thibaut hitting minimum productivity targets within hours, according to Fechter.
EXPECTED RESULTS REALIZED
Key benefits of the project include a reduction in mispicks—which have dropped to zero—and the elimination of those extra quality-control measures Thibaut needed in the New Jersey DCs.
"We've gotten to the point where we don't even measure mispicks today—because there are none," Fechter said in the case study. "Having an extra person at a pack station to [check] every order before we pack [it]—that's been eliminated. Not only is the pick right the first time, but [the order] also gets packed and shipped faster than ever before."
The system has increased inventory accuracy as well. According to Fechter, it's now "well over 99.9%."