Growing satisfaction with IT skills of 3PL providers

Growing satisfaction with IT skills of 3PL providers

Study reveals narrowing gap between IT expectations and user experience for first time since 2003

Tuesday, October 23, 2007

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LONDON, UK: The number of users satisfied with the IT capabilities of third-party logistics providers (3PLs) is up 7 percent after four years of decline according to a new survey. The study, '2007 Third-Party Logistics', is the twelfth in a series of studies on the state of logistics outsourcing and the first to show a rising level of satisfaction.

'2007 Third-Party Logistics' a web-based survey of 1,568 logistics executives from 61 countries shows that the gap is now shrinking between IT expectation and IT performance. Satisfaction hit an all-time low of 35 percent in 2006; this has now increased to 42 percent in 2007, while the expectation percentage remained the same at 92 percent; resulting in a shrinking of the IT expectation/performance gap. However, 3PL providers should not become complacent; IT performance and insufficient IT capability continues to be one of the top three performance issues recorded.

As in 2006, visibility tools (91 percent) and Web-enabled communications (88 percent) are the top two technologies that 3PL users would like to add to their current capabilities, yet there has been a limited increase in usage. RFID remains the technology with the highest future expectations and this year's survey recorded a marginal increase from 12 percent (2006) to 14 percent (2007) in the use of 3PL-provided RFID technology. However, this percentage is far lower than the 56 percent of 3PL users, which expect more from this technology in coming years.

Erik Van Dort, Global Distribution Leader at Capgemini, said: "IT skills are key to the success of third-party logistics providers, yet there is a significant gap between the services required and those provided. To maintain a competitive edge, 3PL providers must take action. Many 3PL providers recognise the value of standardised IT processes and the 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'."

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