New study released at CSCMP Annual Conference addresses “Big Data”

The fact that we’ve entered the Big Data era was among the major themes surfacing at the recently-concluded Council of Supply Chain Management Professionals Annual Conference in Denver.

When Capgemini analysts unveiled the 18th Annual Third Party Logistics Study, they emphasized that shippers (97 percent) and 3PLs (93 percent) feel strongly that improved, data-driven decision-making is essential to the future success of their supply chain activities and processes.

But shippers differ widely in their levels of interest, understanding and adoption, says Capgemini Consulting analyst Melissa Hadhazy. “While other surveys have reported higher levels of participation, 30 percent of shipper respondents and 27 percent of 3PLs indicated that they are planning or currently undergoing big data initiatives,” she says.

Interestingly, about half of each group disagree that Big Data fuels these decisions. In spite of this, shippers and 3PLs concur that Big Data can be leveraged in both functional and strategic aspects of supply chain operations, and to support visibility and make supply chains more agile.

The 18th Annual Third Party Logistics Study—done in collaboration with Penske, Penn State University and Korn/Ferry International—also showed the continuing, positive overall nature of shipper-3PL relationships. Both parties view them as being successful, while shippers report they’re seeing positive results again this year. There’s an average logistics cost reduction of 11 percent; average inventory cost reduction of 6 percent; and an average fixed logistics cost reduction of 23 percent.

According to the results, shippers agree that 3PLs provide new and innovative ways to improve logistics effectiveness, and that they are sufficiently agile and flexible to accommodate future business needs and challenges. Despite ongoing churn in shipper-3PL relationships, in general shippers are increasing their use of outsourced logistics services, and shippers and 3PLs now say they’re about equally satisfied with the openness, transparency, and communication in their relationships.

As suggested in last year’s report, however, several ongoing factors are having an impact on the progress toward the advanced end of the maturity model for shipper-3PL relationships.

While gainsharing and collaboration with other companies—even competitors—to achieve logistics cost and service improvements would appear to be markers for advanced relationships, it seems that these approaches are more preferred in certain shipper-3PL relationships, and less in others. Capgemini says that there are some encouraging results that suggest a slight increase this year in outsourcing of strategic, “customer-facing,” and IT-intensive logistics activities.

Hadhazy and others involved with the survey observed that innovation – when it finally surfaces in the optimization process – is fast but not disruptive.

“And disruption is precisely what we need,” concludes Hadhazy.