3PLs getting better at IT provision, but still way to go

The study, ‘2007 Third-Party Logistics’, which involved 1,568 logistics executives from 61 countries in a web-based survey, found the number of users satisfied with the IT capabilities of their 3PLs was up 7% after four years of decline. Satisfaction hit an all-time low of 35% in 2006, but has now increased to 42%, while the expectation percentage remained the same at 92% – resulting in a shrinking of the IT expectation/performance gap. However, 3PL providers should not become complacent, says Capgemini: IT performance and insufficient IT capability continues to be one of the top three issues recorded. Meanwhile, as in 2006, visibility tools (91%) and web-enabled communications (88%) are the top two technologies that 3PL users want added, yet there has been a limited increase in usage. RFID remains the technology with the highest future expectations and this year’s survey records a marginal increase from 12% (2006) to 14% (2007) in the use of 3PL-provided RFID technology. However, this is far lower than the 56% of 3PL users that expect more from this technology in coming years. “IT skills are key to the success of 3PLs, yet there is a significant gap between the services required and those provided,” says Erik Van Dort, Global Distribution Leader at Capgemini. “To maintain a competitive edge, 3PL providers must take action. “Many 3PL providers recognise the value of standardised IT processes and their impact on adoption rates. However, it is difficult to improve performance without a formal agreement. IT is still the least favourable option for inclusion in a contract, despite effective contracting practices being named as one of the most important factor for success with 3PLs, second only to ‘personal relationships at an operational level’.”