Strengthening the pact between 3PL service providers and user companies

Share on

Service Providers

Strengthening the pact between 3PL service providers and user companies

Third party logistics service providers and the user companies have had the love-hate relationship since eons. While on one hand, user companies need to have a long-lasting partnership in place with the logistics specialists, it’s their unfulfilled wish lists that come in the way of establishing a strong connect. Thanks to the advent and advancement of new age technological solutions and 3PL companies’ innovative service basket, the scenario is fast shaping up in the right direction. Our panel discussion on 3PL and CEOs discussed this very topic in detail with topics encompassing strategies on talent management, sustainability practices, and ways to meet customers’ expectations. This forum provided a poised platform to both parties where the user companies discussed their concerns and 3PLs responded them with the right solutions for them to drive growth. Staying relevant and true to their customer requirements, 3PLs are determined to change the course in their favor and strike a win-win deal for both – USERS & 3PLs. Excerpts…

What are your expectations around from 3PLs in terms of building scale, investing in digitization and how are they keeping up with sustainability objectives?

Umesh Madhyan

Umesh Madhyan, Vice President – Logistics, Hindustan Coca-Cola Beverages Pvt. Ltd.: Our expectations from 3PLs are very extreme because at Coca Cola, we deal with fast moving beverages. The number one expectation which we today are struggling with is how do Third Party Logistics service providers (3PLs) handle scale. Our warehouses handle 400 to 500 trucks in a day, right now there is no such warehouse we have in this country, which is run by professional 3PLs. Not that we have not tried, we've tried multiple times, but we have struggled in achieving the desired efficiency while managing a large-scale warehouse. The way India is growing and the way the per capita is growing in India, we see that this business might double in the next three to five years and there will be a day soon when we will have to handle 800 trucks a day from those warehouses. Obviously there will be more consolidation because the strategy will be more tuned towards single-touch where the goods will reach directly to the consumers.

How exactly do we have an operation which is so efficient for a very large-scale throughput and take care of safety because when there are 400 trucks at a time, there is a huge risk of people with material handling equipment running here and there and a lot of handling happening within the warehouse, which creates a lot of pressure. Next is if you travel abroad, there are large multi-user ASRSs built and invested by 3PLs, which is a scalable 3PL operation. Lastly, there is a great challenge posed by attrition of people. If you have a good 3PL as your partner, most of these challenges get resolved to a great extent. These are basically 3-4 problems we are struggling, and we are expecting 3PLs to evolve to that level where we can actually try such experiments and we are still open for evaluating anyone who claims that they can solve all of these.

Akhil Srivastava

Akhil Srivastava, Director – Supply Chain Operations, AB InBev: There are a lot of opportunities in the supply chains of today and hence our expectations have also heightened with time. Supply chains are evolving with supply chain innovations taking place. We place immense emphasis on Customer Centricity where we are looking at rolling back the cost so that I can pass on the benefits to the customers as well. Hence looking at Cost, Quality, Service and Efficiency as the four levers based on which we select our 3PL partners.

The supply chains of yesterday's and as of today work on a concept of KPIs. I don't think the supply chains of tomorrow will be that. I was in Boston recently at MIT and learned a concept called KLI (Key Learning Indicator), which means the supply chains of tomorrow need to be anticipatory in nature so that they are resilient and agile. Hence, we expect the 3PL providers to help us make our supply chain more agile and resilient with KLIs – Real-Time Insights. Another interesting concept that I would like to bring to fore is 3V –

  1. Everyone wants to Increase Velocity in their logistics management system to serve to the customers from Zepto delivering in 10 minutes to a 30-minute Domino's promised delivery.
  2. The second V is about Reduced Variability because you want to give customers the same standard product – quality, service and other measurement metrics on order by order.
  3. The third V is Increasing Visibility

think that's where the digitization of the supply chain comes into picture in helping companies to bring the 3V Concepts alive and to really look at KLI so that we are a continuous improving Machinery. I think these are the latent opportunities for 3PLs of today.

Binu Vijay Kumar

Binu Vijay Kumar, GM - Supply Chain, Thermofisher Scientific: We are looking for 3PLs who could scale up/down at short notices in these uncertain demand scenarios. Digitization and technology in supply chain management is the future, but this should be customized based on client requirements. Sustainability is the key and to achieve this, I believe the usage of solar power, LED lights, tree plantation in the campus, EV deliveries and lesser fuel consumption should all be the key areas.

What are you looking from your 3PL partners?

Umesh Madhyan: We are not looking at cost reduction opportunities, for us it’s more about building and sustaining right partnerships. We are looking for a partner who can tell us how we can bring down cost of our supply chains in a timely manner. We want someone who comes and says that if you give me your inventory, your inventory guarantee stands with me. The partner doesn't go on limited liability or any such clause in his agreement. We are looking for someone who can ensure 99.5% fulfilment of all orders I get every day by deploying logistics innovations, the best techniques, technological tools, automations, etc. I believe that technology will play a major role in making that happen. For instance, if we get partners who are increasing cost by 3-4% and guaranteeing service and cost reduction, we will be happy to have them onboard.

Akhil Srivastava: I strongly support Peter Drucker’s famous quote, “Do what you do best, outsource the rest”. What I see and how the future for supply chain unfolds is that supply chain will become a competitive Advantage going forward. We are witnessing a transition where now with different channels to serve whether it's e-commerce, modern trade, or other RTM markets, the cost factor would not be the most important factor because there are more important pillars to address such as the customer centricity and service level agreements.

Added to that, capacity and capability will start emerging as crucial decision making aspects because if we are looking at our supply chain system to be a competitive advantage and we are still looking to outsource it to achieve scalability and flexibility, we would like to have a 3PL partner who has the competitive advantage in achieving these two critical parameters, which means deeper pockets to serve as well. This is how user companies should approach their 3PL partners.

Binu Vijay Kumar: The KLI directly impacts the KPI. I see a lot of people coming up with very good facility, setting up very good infrastructure but what truly distinguishes a CFA from a 3PL is the mindset – a culture of continuous improvement. They should be able to solve our problems. It’s not just about service level agreements and we deliver the desired outcomes. We really need to partner with them in order to achieve the desired outcomes. We deal with high value equipment, and we don’t have repeat customers or unlimited customers. Our target segment is very limited owing to the segment we deal in. In that scenario, if someone has purchased a million-dollar instrument and that instrument requires a spare part replacement, I can’t go back to the customer quickly. 

You would be surprised to know that the spare part from the factory to the warehouse just takes close to 48 hours. Once it reaches the warehouse, it used to take 5-6 days to reach the customer. To solve this problem and reduce the TAT, we brainstormed with our 3PL partners and the result of this is that we can now deliver the part in just about a day. It’s all about effective partnership and supply chain innovation. Our partner felt committed towards achieving the objective that we had set out for ourselves, they started contributing on their own and the result has been phenomenal after that. The collaboration increased to such an extent that they have taken all the KPIs to an all time high. The crux of the matter is that it’s not about the cost, it’s more about the extent to which the 3PL partner is willing to go to solve a particular problem faced by the users. In the end, if you have a 3PL partner who deliver you the desired result, they deserve a premium because at the end of the day, it should be a winwin situation for both.

Where do you think 3PL companies are lagging in terms of meeting customers’ expectations? How can they overcome new obstacles faced by users?

Akhil Srivastava: We must lay an immense thrust on long-term partnership with co-investment to create and share efficiency from operations. 3PLs should look at bringing technology framework with WMS, TMS, FMS and automation to lead and grow the digitization for building businesses of tomorrow. The new age tech of AI and ML would be an added layer along with RPA and RTTVP to enable insights and analytics based demand servicing for profitable and sustainable business. Most important is mindset for long-term and shared goals so that the association grows from transactional to long term partnership. Only with that view can we expect synergies and strategic association as an extended enterprise.

Binu Vijay Kumar: I firmly believe that partnership is lacking, which further results in lack of trust. We should collectively do things together and deliver exceptional results…recognize teams involved and that builds trust and partnership. Technology is crucial but the ability to spot where technology can make a difference is more important. The relationship needs to transition from Transactional to Value addition. Otherwise, the discussion would only be around costs.

Chetan Kumria

Chetan Kumria, MD, XCELL Supply Chain Solutions Pvt. Ltd.: As trusted business partners, 3PLs can play a major role in overcoming supply chain challenges and obstacles that are faced by customers in the areas of service, cost and managing working capital. The customer needs to work with 3PLs as a partner, share key details with them and take their inputs on key factors that would be used to overcome obstacles faced by them.

How can user companies align their expectations and goals with their 3PL provider and monitor their progress?

Akhil Srivastava: User companies require to develop supply chain solutions companies as partners of choice (choose wisely basis capacity, capability and progressive mindsets), then work with these suppliers for long term shared vision to grow and share the value. The relationship should be symbiotic and synergistic with shared common goals, KPI and success metrics.

Companies should also use their global expertise to benchmark and learn from global best practices to emulate with pride successful case studies to build an optimisation operations excellence.

Going forward optimization is working on deep tech for real-time insights and digitization. The future is about debottlenecking the unknown to real time alerts for immediate intervention and action. Companies must move from fire-fighting to responsive and agile logistics and operations management through the effective use of automation and digitization.

Binu Vijay Kumar: Once you partner with a 3PL, consider them as an extended Team. Motivate and recognize them to go above and beyond to achieve larger interests of the organization.

Chetan Kumria: Any long-term business partnership is based on trust and that can be gained by providing a cost-effective, high-performance service by the 3PLs. In order to align their goals with 3PLs, user companies must set up joint realistic goals and then track the progress through a structured KPI metrics review system. While doing this, use of technology and digital tools is key to success. It is important to have a long-term business partnership with customers for 3PL companies and to manage this relationship, performance and trust are the two key pillars on which this relationship grows. At the same time, providing high standards of service at the right Cost to Serve will drive this relationship to new levels.

Dr Arunachalam R

Dr Arunachalam R, MD & CEO, IBOB & Board of Director, SF Logistics Pvt. Ltd.: For a successful partnership, aligning expectations and goals with supply chain services companies is essential. Recognize that the logistics landscape is dynamic. Be prepared to adjust expectations and goals as market conditions change or new opportunities arise. On this standard, the user companies must have a clear goal and objective along with an open and Transparent communication.

Collaborative planning of the parties can improve better visibility and lead to favourable outcomes. A defined KPI and metrics adhering with the goals of the company should be used to measure the success of the partnership. Regular

Review meetings to discuss the progress, challenges and opportunities emphasis on the continuous Improvement culture should be MUST.

What are the key performance matrices based on which you select a 3PL partner?

Akhil Srivastava: Here are seven of the most useful KPIs for supply chain leaders to consider when determining whether their 3PL is delivering services that are in line with their company's expectations:

Dock-to-stock time: One of the duties of a logistics service is receiving products into the warehouse and placing them in the correct storage areas, so the dock-to-stock KPI measures the length of time between taking the items into the warehouse dock and adding them to inventory storage. Warehouse workers cannot pick and dispatch products until they are put into stock and become available for order fulfilment. A fast dock-to-stock time increases product availability and helps avoid the need for order cancellation because items are out of stock.

Cost per unit shipped: Cost per unit shipped indicates how much it costs the company to fulfil orders. Although supply chain leaders can measure and segment this KPI in various ways, it most commonly indicates the end-to-end cost to pick, pack and ship a product to its destination. This KPI can consider the price of storage, labor, packaging materials and other factors to indicate an all-in cost. It's most useful to companies for tracking costs over time and managing order fulfilment expenses that negatively affect profit margins.

Inventory accuracy: Inventory accuracy is a comparison of physical stock levels in warehouse storage to the expected stock levels in the 3PL's warehouse management system software. WMS inventory levels can vary depending on the number of products received at the warehouse and order fulfilment, among other factors. Processing products can lead to errors, so 3PL providers use physical counts of inventory to ensure that their WMS software accurately reflects actual stock levels. Any difference between WMS and physical stock will negatively affect inventory accuracy.

Companies and their 3PL provider can use the inventory accuracy KPI to identify inventory shrinkage. Some of the causes of inventory shrinkage are inaccurate picking and packing, problems when receiving goods and theft, among other factors. A 3PL can then investigate the cause of the shrinkage.

Order accuracy: Order accuracy is the percentage of orders that workers picked and packed correctly. That process begins with the picker selecting the correct products based on the WMS's request. The picker then packs those items, secures the packaging and prepares the product for distribution. Order accuracy is an important KPI because customers will likely lose trust in a company over time if they receive the wrong item. 

In addition, replacing an item costs the company more money because workers must repackage and replace the erroneous order.

Shipping accuracy: A shipping accuracy KPI is the percentage of products and packages that are delivered to the correct destination. Missing products can lead to significant frustration for customers, so shipping accuracy is critical for minimizing wastage, costs and customer dissatisfaction. If shipping accuracy is too low, a 3PL provider will likely work with the distribution and transportation departments to reduce errors.

On-time shipping and delivery: The ontime shipping KPI typically indicates the length of time between the 3PL provider receiving the order and the time when the product is dispatched to its destination, while on-time delivery usually indicates the amount of time it takes for the customer to receive their product. Some 3PL providers combine these two factors into one KPI, while others measure them separately. These KPIs are crucial for meeting customer expectations. Companies are under more pressure than ever to provide fast order fulfilment and delivery, so supply chain leaders must closely track their organization's shipping and delivery processes.

Reverse logistics and return processing: Part of selling products is dealing with customer returns, and the process of returning goods to a 3PL is known as reverse logistics.

These KPIs enable businesses to turn around, seamlessly build KPO and systems for reducing waste, move from inefficient to optimized working.

Chetan Kumria: In my view, the selection criteria on which companies select 3PLs are based on their experience, team, cost effectiveness, service performance, capability and technology. Apart from this, other factors are geographical footprint and capacity for future expansion.

What are the challenges faced by 3PLs in addressing the demands of users?

Ajit Jangle

Ajit Jangle, MD, FM Logistic: Despite growing demand, logistics in India is plagued by numerous challenges that can vary depending on the industry, location, and specific user requirements. These challenges include cost pressures, high returns and poor infrastructure.

Businesses today often have intricate supply chain requirements that involve multiple suppliers, carriers, and distribution channels. Managing and optimizing these complex networks is one the biggest challenge faced by the industry today. Additionally, there is insufficient integration of transport networks, information technology and warehousing & distribution facilities. At FM Logistic India, we have an efficient and well-connected distribution network.

We have a wide-spread transportation network having 20+ branches across India with 100+ dedicated vehicles. Our WMS and TMS are well-equipped to track all material movement activities and provide stage-wise information to our customers.

Recently we introduced our 1st Control Tower facility in India. In India, we are among the top contract logistics companies that offer this technologydriven supply chain service that will enable our customers to significantly optimize their logistics cost through FM’s gain share mechanism. Through this new offering, FM Logistic provides our customers all across the country with centralized transportation control tower services that offer end-to-end visibility.

Our new offering provides consolidation, optimisation and efficiency – all the prerequisites for a robust supply chain. In today’s volatile business environment, it is imperative to build and maintain robust and resilient supply chains. Through this new service, we are certain that we ensure the future readiness of our customers’ supply chains. By means of this technologydriven solution, we will efficiently enable our customers to expand their business horizons.

Trained manpower is essential both for the third-party logistics sector as well as manufacturing and retailing sectors, which is very weak at a practical level, i.e., IT, driving and warehouse as well as at a higher strategic level. The disorganized nature of the logistics sector in India, its perception as a manpower-heavy industry and its lack of adequate training institutions have led to a shortfall in skilled management and client service personnel.

At the warehouse level, FM Logistic India has deployed the Supervisor Development Program through which existing warehouse associates can become Team Leaders. The eligible associates are evaluated based on their performance. FM Logistic in India has also invested in the digitalization of its various functions, notably WMS (Warehouse Management System) and TMS (Transport Management System) which offer high-quality service and realtime visibility to customers. Our WMS, known as Trariti, is 100% customizable and integrated with our TMS.

Poor facilities and management are the reason for high levels of loss, damage and deterioration of stock, mainly in the perishables sector. Part of the problem is insufficient specialist equipment, i.e., proper refrigerated storage and containers, but it is also partly due to a lack of training.

Through NG Concept, FM Logistic’s sister concern, FM Logistic India is developing state-of-the-art Multi- Client Facilities (MCF) to cater to the growing logistics industry in India. Our first owned MCF in India is located in Farrukh Nagar, Gurugram and is spread across 7 lakh sq.ft. This Grade A facility is the first in India to receive LEED Gold-certified warehouse in India and the best LEED-rated logistic facility in the country. The facility enjoys strategic access to Kundali, Manesar and Palwal expressways for faster connectivity to all major consumption centres in the North. The MCF has a storage capacity of 100,000 pallet positions and provides a dedicated area for co-packing and other value-added services. Furnished with best-in-class safety and security features, the MCF offers cost-efficient quality, storage and handling services. We also operate Grade A MCFs in Mumbai and Bengaluru. All our facilities are built on par with international standards and are equipped with the best-in-class infrastructure. Every care is taken at these facilities to ensure the safety and security of our collaborators.

Where does the gap lie in striking the right balance between the 3PLs and the users’ expectations? How can they be removed?

Chetan Kumria: The gap in striking the right balance can come in two ways, either in the form cost or service. If the users do not pay the right cost to the 3Pls there can be gaps in providing the desired service and similarly if the 3PLs do not provide the right service, then there can be gap in expectations from the users. These gaps can be eliminated in the beginning of the relationship by agreeing to the right service at the right cost and then by doing structured and timely reviews between the user and 3PLs to eliminate any gaps that may arise during the course of relationship.

Dr Arunachalam R: To strike the right balance and remove the gaps between the 3PLs and the users’ expectations, comprehensive Service Level Agreement (SLA) that outlines responsibilities, KPIs, reporting formats, and penalties for non-compliance should be followed. The parties should share insights, feedback, and concerns to improve visibility and decision-making. Evolve rapidly to the changing business environment and embrace change management practices.

Build trust through consistent performance, transparency, and accountability. Implement robust performance monitoring mechanisms, by providing insights into key metrics and identify areas for improvement.

Acknowledge and respect cultural differences, whether they pertain to business practices, communication styles, or work expectations. Encourage cross-functional collaboration between the user and the 3PL. Set realistic and achievable expectations by allocating sufficient resources, both in terms of time and personnel, to manage the partnership effectively. Invest and concentrate in training, technology, and strategic support to ensure the success of the collaboration.

Ajit Jangle: Striking the right balance between 3PLs and users' expectations can be challenging, and the gap can emerge in several areas. Here are some common issues and ways to address them:

Communication and Transparency: Lack of effective communication and transparency between 3PLs and their clients can lead to misunderstandings and unmet expectations. At FM Logistic India, we ensure to maintain operational transparency through real-time tracking systems. We conduct regular review meetings with our customers on a monthly basis to ensure that our offerings are in line with the requirements and that operational gaps, if any, are taken care of. Regular, open communication is key.

Both parties should maintain clear lines of communication and share information regarding inventory levels, order status, and potential issues. Technology, such as real-time tracking systems, can enhance transparency.

Service Level Agreements (SLAs): Misaligned SLAs can lead to discrepancies in performance expectations. Customers may expect faster service than what the 3PL can provide. At FM Logistic, our team of legal experts ensure that every SLA is well-defined, realistic, and mutually agreed upon. We regularly review and update them to reflect changing business needs and market conditions.

Scalability and Flexibility: Owing to the e-commerce boom fuelled by the Covid-19 pandemic, customers' business needs change rapidly. Oftentimes, 3PLs might struggle to adapt quickly to these changes. At FM Logistic, we draft flexible agreements that allow for scalability. We possess the capability to adjust staffing, resources, and infrastructure to accommodate the needs of our customers’ business requirements. 

Technology Integration: Incompatibility between the 3PL's systems and the user's systems can lead to inefficiencies and errors. FM Logistic India has implemented paperless operations with barcode scanning and GPS tracking at our warehouses. We have also invested in the digitalisation of our various functions, notably WMS and TMS that offer high-quality service and real-time visibility to our customers.

Quality Control and Compliance: Logistics, being an indispensable function of any business operation, it is imperative to ensure that the highest level of quality is delivered while strictly adhering to compliance requirements. At FM Logistic India, we are committed to providing logistics services as per our customer requirements. We strive for excellence and our guiding values are recognition of the individual, commitment and credibility.

Data Security and Privacy: As a 3PL service provider, we are legally obliged to protect our customers’ data from being lost or misused. Data cybersecurity is also crucial to preventing the reputational risk that accompanies a data breach. At FM Logistic, we implement robust data security measures and ensure compliance with data protection laws.

Closing the gap between 3PLs and users' expectations requires ongoing collaboration, communication, and a willingness to adapt to changing circumstances. It's essential for both parties to work together to identify and address any issues that arise and to continuously strive for improvements in their logistics partnership.

Dr Arunachalam R: 3PL companies have made significant progress in meeting customers' expectations, but there are areas which requires strategic improvement. The system faces gaps in providing real-time, end-to-end visibility of information, easy data sharing and integration and flexible operations across the entire supply chain which is expected by the customers. Timely and clear communication regarding their shipments, delays, and other supply chain events, retaining skilled logistics professionals, especially those well-versed in technology and data analytics also plays a vital role in leading to dissatisfaction. In this current era, Sustainability and Ethical concerns in commitment to eco-friendly practices, may involve challenges related to sourcing, transportation modes, and reducing carbon footprint.

To overcome these obstacles and continue meeting customers' expectations, 3PL companies must develop agile supply chain strategies, Develop strong partnerships and work towards seamless integration of systems.

Prioritize effective and transparent communication with customers, providing proactive updates and solutions to address any disruptions. Explore innovative ideas in Sustainable Logistics sector. Flexibly address the challenges and focus on customer-centric solutions.

How are 3PL companies in India catching up with their global counterparts in meeting the everevolving expectations of customers?

Dr Arunachalam R: There are various strategic measures that 3PLs have adopted and are continuously working on to serve to the ever-evolving expectations of customers. These include:

  • Help moving towards doing business digitally: Cut down the cash collections from Kirana stores or avoiding the cash on delivery - As India is moving into digital world, we took the responsibilities of making that happen. We ensure the delivery team carries the required means for getting the digital payments. We have been effectively doing this for the past two years.
  • Extremely fast deliveries: Another customer asked us to pick the product from the warehouse within a minute and reach to their customers in 10 to 15 minutes. We have been doing this for many months across India.
  • Help India moving to Electric Vehicles: There has been a growing demand to reduce diesel trucks and increase the EV deployment. We have been able to successfully participate in this movement on a pan-India basis and deployed about 50 such trucks.

By these cases, we want to bring to fore our tailormade solution proposition for our customers as we don’t believe in offering run of the mill services.  Our solutions are always based on our customers’ specific requirements.

Three years back I visited a large distribution centre of our group outside India. The facility is about 500,000 sqft, certainly a gigantic one. Only 10 operators are working in that facility because everything is controlled through technology. This certainly gives speed, accuracy and less operating cost. Whether India needs such an advanced technology, decision is purely based on the usage.

Ajit Jangle: Global trade, increased competition, and the desire for improved logistics efficiency have necessitated organisations to re-examine their competitive strategies. Organisations have realised that their supply chain and logistics function form a critical part of their business operations. This increasing awareness that competitive advantage does not only come from product offerings but also through the upgrade of the delivery system has been critical in the evolution of logistics from its former supporting role to a more strategic role in recent years. To keep up with these ever-changing requirements of customers, 3PL service providers need to continuously evolve and enhance their service offerings. 3PLs can meet the everevolving customer expectations in the ways below:

Advanced Technology Integration: 3PLs are investing in advanced technology, including warehouse management systems (WMS), transportation management systems (TMS), and realtime tracking tools. These technologies improve visibility, efficiency, and accuracy in logistics operations, meeting users' demands for transparency and reliability.

FM Logistic India has implemented paperless operations with bar code scanning and GPS tracking at its warehouses. We have also invested in the digitalisation of our various functions, notably WMS and TMS that offer high quality service and real-time visibility to our customers. Our WMS, known as Trariti, is 100% customizable and integrated with our TMS.

Data Analytics and Predictive Analytics: 3PLs use data analytics to optimize supply chain operations. They analyze historical data to identify trends and patterns, enabling better demand forecasting, inventory management, and route optimization. This helps users reduce costs and improve service levels. Customised Solutions: In today’s dynamic business scenario, it is imperative for 3PL to provide tailored logistics solutions to meet the unique needs of each user. This involves creating customized logistics solutions, such as multi-modal transportation options, value-added services, and flexible warehousing solutions.

Green logistics: Environmental sustainability is a growing concern. 3PLs today need to implement eco friendly practices, such as optimising transportation routes to reduce emissions and using energy-efficient warehouse technologies, to align with users' sustainability goals. Sustainability is at the heart of our DNA at FM Logistic. We are consistently working towards various sustainable development initiatives, which include diversity & inclusion at the workplace, use of green energy sources for power generation, minimal use of plastic packaging materials at the warehouse, etc. At the global level, we are a proud member of the United Nations Global Compact Network.

Value-Added Services: 3PLs are increasingly offering value-added services beyond traditional logistics, such as kitting, assembly, and quality control. These services provide users with additional support in managing their supply chain processes.

Omni-channel Logistics: The next generation of business requires logistics networks tailored to the needs of each and every channel. Omni-channel services are the need of the hour and companies are realigning supply chains to cater to omni-channel from the same warehouses.

By addressing these demands and continuously adapting to changing market dynamics, 3PLs aim to provide value-added services that help users optimize their supply chains, reduce costs, enhance customer satisfaction, and achieve their business objectives.

What is the crucial role of technology in achieving the right equilibrium between the users’ demands?

Dr Arunachalam R: Technology plays a vital and transformative role in supply chain. By leveraging technology effectively, 3PLs and users can create a supply chain ecosystem that is agile, responsive, and capable of delivering optimal outcomes while meeting and exceeding user expectations. Users can proactively manage exceptions and disruptions, making informed decisions to mitigate risks by real-time tracking of inventory, shipments and other supply chain activities. Technology facilitates tailored solutions by enabling dynamic routing, adaptive scheduling, and personalized order fulfilment which leads to improved efficiency and cost savings. Automation technologies, such as robotics and AI, streamline warehouse operations benefitting to faster order cycle times, reduced errors, and improved efficiency in meeting demand fluctuations. Predictive analytics and machine learning can anticipate user demand patterns, enabling proactive inventory management and replenishment strategies.

Technology platforms and software facilitate seamless communication and optimize stock levels which reduces the risk of stockouts or excess inventory. These systems identify trends, bottlenecks and areas of improvement, contributing to continuous enhancement. In essence, technology serves as the backbone that empowers 3PLs and users to synchronize their operations, share information, and adapt to evolving demands.

More on Service Providers