Many of the top supply chain executives gathered in Orlando, Florida the last week of September for the annual Council of Supply Chain Management Professionals conference. Discussions focused on overcoming supply chain disruption, and how the logistics industry will enter a new era over the next decade.
Disruptive forces such as new technology, changing regulations, talent shortages, and infrastructure bottlenecks continue to be the prime focus for supply chain executives and managers. While these challenges threaten to change the rules of the supply chain world, the companies that adapt to beat these disruptions will more than likely come out ahead.
One way many companies are using to contest these disruptors is collaborating with a third-party logistics provider (3PL). During the panel – Delivering on the Customer Promise – attendees heard executives from Fram, True Value, and Ryder speak about how partnerships help overcome many of the challenges companies face today.
Abhinav Shukla, SVP & COO at True Value, stated: “We live in a time of escalating expectations. Retailers expect a 48-hour fill rate. This puts stress on just-in-time delivery and high order accuracy. These are the table stakes. We are pressured to be more effective through our supply chain.”
Steven Crowthers, Director of Distribution at FRAM, added: “Because of the pressure, there is more complexity. This adds to costs. We need to be innovative. That is where strategic partnerships come into play. Ryder taught us what they are best at.”
According to Armstrong & Associates, approximately 11 percent of U.S. logistics spend in 2015 was outsourced to 3PLs. The U.S. 3PL market has grown by roughly seven percent annually since 2009, driven by an increase in the outsourcing of both core and noncore logistics management activities.
By outsourcing their operations to Ryder, Fram and True Value were able to drive more value from their supply chain while being able to put more focus into their core competencies. Shukla and Crowthers agreed success of the partnership relies on both teams.
“We are in the ‘Now’ economy and consumer behavior continues to evolve,” Shukla said. “No trend in recent history has made more demands on a company’s supply chain. Our relationship [with Ryder] is open and honest. We have made improvements and evolve to create continuous improvement opportunities.”
“Ryder sits with us, and we are one unit,” Crowthers added. “In our distribution center, you cannot tell a Ryder employee from a Fram employee. Their goal is our goal.”
Both partnerships have achieved increased flexibility, visibility, and talent management. In the case of Fram, since partnering with Ryder in 2013, they have seen a seven figure decrease in costs year-over-year. True Value, a Ryder partner since the late 1970s, has achieved 97.5 percent fill rates and 99.7 percent accuracy on all orders.
According to the CSCMP State of Logistics Report, the need to develop long term relationships – like Fram and True Value have with Ryder – is key for profitable and sustainable growth. The current environment is giving way to a collaborative, interactive, designed based approach.
“Supply chains are becoming a differentiator,” said John Diez, President of Dedicated Transportation Solutions at Ryder. “More and more companies are looking to outsource. We take our experience and leverage it to create an advantage for companies.”
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