3PL Performance - Meeting Customer Expectations
A qualified, independent and unbiased perspective on how successfully 3PL providers are meeting customer demand... an essential tool for anybody reliant on the performance of 3PLs in an increasingly challenging global economy. Customers of contract logistics service providers (3PLs) are often heard to complain. Complaints include claims that their service provider does not fully understand their requirements or business, does not offer a solution just a commodity service, and hence do not add enough value to their current supply chain operations.
On the contrary, there are also customers who are renewing contracts year-on-year, paying their supplier a premium for a professional and reliable service backed up by tailored and value add solutions.
Hence Analytiqa has undertaken dedicated research to fully understand what the current state of play is in relation to service provider and customer relationships within the contract logistics market in Europe.
In a market that is very competitive, highly challenging and globalised, where customer loyalty can be scarce, the current outsourcing dynamics and basis of many existing business relationships are facing greater exposure and scrutiny.
Hence this report will go a long way to assist both customers and providers to maximise the potential of their future business relationships.
To request more details or a report brochure contact Analytiqa on +44 (0)1707 37 22 11. Alternatively click here to send an email to Analytiqa.
Scope of this report
As a professional within the Supply Chain industry, on either the provider or customer side of the market, this report will assist you to identify the key drivers impacting on 3PL customer relationships, offering practical solutions to maximise your business relationships.
Based on primary research undertaken directly with senior executives within the contract logistics industry, the report will provide you with invaluable insight unavailable from any other source. For example, this report identifies the following:
The independent and unbiased nature of Analytiqa’s privileged position in the market ensures that the analysis in this report portrays an accurate, unbiased view of the current market and its key participants.
As a supplier, customer or logistics service provider, this report will assist with the informed identification and targeting of communication and service improvements within your supply chain operations.
On the contrary, there are also customers who are renewing contracts year-on-year, paying their supplier a premium for a professional and reliable service backed up by tailored and value add solutions.
Hence Analytiqa has undertaken dedicated research to fully understand what the current state of play is in relation to service provider and customer relationships within the contract logistics market in Europe.
In a market that is very competitive, highly challenging and globalised, where customer loyalty can be scarce, the current outsourcing dynamics and basis of many existing business relationships are facing greater exposure and scrutiny.
Hence this report will go a long way to assist both customers and providers to maximise the potential of their future business relationships.
To request more details or a report brochure contact Analytiqa on +44 (0)1707 37 22 11. Alternatively click here to send an email to Analytiqa.
Scope of this report
As a professional within the Supply Chain industry, on either the provider or customer side of the market, this report will assist you to identify the key drivers impacting on 3PL customer relationships, offering practical solutions to maximise your business relationships.
Based on primary research undertaken directly with senior executives within the contract logistics industry, the report will provide you with invaluable insight unavailable from any other source. For example, this report identifies the following:
- Trends and drivers: in-house versus outsourced solutions
- 3PL contract trends: average number of providers used and contract lengths
- 3PL selection criteria and selection methodologies
- Manufacturers and retailers supply chain investment and operational challenges
- Dynamics of the 3PL / customer relationship
The independent and unbiased nature of Analytiqa’s privileged position in the market ensures that the analysis in this report portrays an accurate, unbiased view of the current market and its key participants.
As a supplier, customer or logistics service provider, this report will assist with the informed identification and targeting of communication and service improvements within your supply chain operations.
- Identify the key drivers of in-house and outsourced logistics activity
- Assess the use of 3PLs, including numbers employed and contract lengths
- Recognise the decision making process of choosing a 3PL
- Understand the logistics investment priorities of 3PL customers
- Pinpoint the key issues and concerns facing 3PL customers including costs vs service; forecasting; core competencies
- Analyse customer confidence in 3PL contribution
- Benchmark 3PL performance against satisfaction indicators
- Evaluate opportunities for winning and sustaining relationships
- Target business development initiatives based on future strategic requirements
CHAPTER 1 EXECUTIVE SUMMARY
1.1 Decision Making – Business Logistics Activity
Figure 1.1: Logistics is often viewed as a ‘non-core’ activity, 2009
1.2 Strategic Planning – Supply Chain Outsourcing
Figure 1.2: Achieving a service/cost balance is most important when choosing a 3PL, 2009
1.3 Supply Chain Focus
Figure 1.3: Regional changes and increased outsourcing are top of the agenda, 2009
1.4 Customer Satisfaction with 3PLs
Figure 1.4: 3PLs demonstrate a strong ability to increase their clients’ customer retention levels, 2009
1.5 The Future of Outsourcing
Figure 1.5: One-in-seven customers will not consider purchasing additional services from their logistics providers, 2009
CHAPTER 2 INTRODUCTION
2.1 Research Objectives
2.2 Report Structure
2.3 Research Methodology and Data Definitions
Figure 2.1: Analytiqa primary research – manufacturer and retailer participation, 2009
CHAPTER 3 KEY ASSUMPTIONS AND ACTION POINTS
3.1 Key Assumptions
Decision Making – Business Logistics Activity
Strategic Planning – Supply Chain Outsourcing
Supply Chain Focus
3PL Customer Satisfaction
The Future of Outsourcing
3.2 Key Action Points
Strategic Partnership Approach
Technology Driven Supply Chains
Communication and Customer Orientation
The Rise of the ‘Added-Value’ 3PL
Effective Corporate Awareness Campaigns from 3PLs
CHAPTER 4 DECISION MAKING - BUSINESS LOGISTICS ACTIVITY
4.1 Logistics Expenditure
Table 4.1: Respondents’ annual logistics expenditure, 2009
Figure 4.1: Logistics expenditure is weighted evenly between large and smaller accounts, 2009
4.2 Logistics Budget Allocation
Table 4.2: Logistics budget as a share of annual company turnover, 2009
Figure 4.2: Over 60.0% of companies spend up to @6.0% of turnover on logistics, 2009
4.3 Logistics Outsourcing
4.3.1 Western Europe
Table 4.3: Western European logistics outsourcing rate (%) 2006-2008
Table 4.4: Western European contract logistics market growth (%) 2006-2008
Figure 4.3: Western Europe - manufacturers and retailers outsource around one-third of their logistics, 2008
4.3.2 Central and Eastern Europe
Table 4.5: Central and Eastern European logistics outsourcing rate (%) 2006-2008
Table 4.6: Central and Eastern European contract logistics market growth (%) 2006-2008
Figure 4.4: CEE region - manufacturers and retailers outsource over one-fifth of their logistics, 2008
4.4 In-house Logistics Activities
4.4.1 Drivers for Maintaining In-house Logistics Activities
Figure 4.5: Fear of losing control drives in-house activity, 2009
Table 4.7: Reasons for Operating Logistics Activities In-House, 2009
4.5 Outsourced Logistics Activities
Table 4.8: Outsourcing by logistics activities, 2009
Figure 4.6: Manufacturers and retailers commonly outsource their distribution function, 2009
4.5.1 Drivers for Outsourcing Decisions
Figure 4.7: Logistics is often viewed as a ‘non-core’ activity, 2009
4.5.2 Benefits of Outsourcing
Figure 4.8: Three major benefits of divesting your supply chain, 2009
Table 4.9: Key benefits of outsourcing, 2009
4.6 Using Third-Party Logistics Providers
4.6.1 Number of 3PLs used
Table 4.10: Number of 3PLs Employed, 2009
Figure 4.9: One-in-five companies employ between six and ten 3PLS where activity is outsourced, 2009
4.6.2 Outsourced Contract Numbers
Table 4.11: Number of outsourcing contracts over the past three years, 2009
4.6.3 Contract Lengths
Table 4.12: Trends in Outsourcing Contract Lengths Over the Past Three Years, 2009
4.7 Chapter Summary: Key Findings
CHAPTER 5 STRATEGIC PLANNING – SUPPLY CHAIN OUTSOURCING
5.1 Invitations to Tender
Figure 5.1: Over 70.0% of manufacturers and retailers approach up to six 3PLs per contract, 2009
Table 5.1: The number of 3PLs approached by manufacturers and retailers, 2009
5.2 Methods of Identifying Suitable 3PLs
Figure 5.2: Manufacturers and retailers favour ‘internal’ search and selection methods, 2009
Table 5.2: Methods of researching new 3PLs, 2009
5.3 Criteria for Choosing a Third-Party Logistics Provider
Figure 5.3: Achieving a service/cost balance is most important when choosing a 3PL, 2009
Table 5.3: Top criteria to consider during 3PL search and selection, 2009
5.4 Chapter Summary: Key Findings
CHAPTER 6 SUPPLY CHAIN FOCUS
6.1 Supply Chain Performance
6.1.1 Current Supply Chain Performance
Figure 6.1: 3PL users remain optimistic about their current supply chain performance, 2009
Table 6.1: Perceptions of current supply chain performance, 2009
6.1.2 Supply Chain Performance Trends
Table 6.2: Changes in supply chain performance between 2008 and 2009
Figure 6.2: 90.0% of 3PL customers have improved their supply chain performance from 2008 to 2009
6.2 Supply Chain Issues
6.2.1 Cost Transparency
6.2.2 Forecast Accuracy
6.2.3 Impact of Economic Climate on the Supply Chain
Table 6.3: Impact of global recession on supply chain operations, 2009
Figure 6.3: One-in-four retailers and manufacturers experience signficant effects to their outsourcing activity, 2009
6.3 Supply Chain Initiatives
6.3.1 Service Focus
6.3.2 Supply Chain Consolidation
6.3.3 Cost Control
6.3.4 Technology
Table 6.4: Current supply chain initiatives, 2009
6.4 Future Supply Chain Requirements
6.4.1 Outsourced Logistics – Short Term
Figure 6.4: Nearly one-half of 3PL users expect to make no significant changes to their supply chain in 2009-2010
Table 6.5: Outsourced logistics developments in 2009-2010
6.4.2 Supply Chain Strategy – Long Term
Table 6.6: Supply chain strategy over the next three years, 2009
Figure 6.5: Regional changes and increased outsourced are top of the agenda, 2009
6.5 Chapter Summary: Key Findings
CHAPTER 7 3PL CUSTOMER SATISFACTION
7.1 Defining the 3PL-Customer Relationship
Table 7.1: The types of 3PL-customer relationships, 2009
Figure 7.1: 3PLs are being recognised as supply chain partners, 2009
7.2 3PL Overall Performance
Figure 7.2: One-half of customers are merely satisfied with the overall performance of their 3PLs, 2009
Table 7.2: Customer satisfaction with overall 3PL performance , 2009
7.3 Performance Characteristics of 3PLs
7.3.1 Competences of 3PLs
Table 7.3: Assessing the strategic competences of contract logistics providers, 2009
Table 7.4: Assessing the service provision of contract logistics providers, 2009
7.3.2 Capabilities of 3PLs
Table 7.5: Assessing the strategic capabilities of contract logistics providers, 2009
7.3.3 Compatibility with 3PLs
Table 7.6: 3PL compatibility with their customers, 2009
7.4 Performance of 3PLs by Activity
Figure 7.3: Customer satisfaction with outsourced activities, 2009
7.5 Contribution of 3PLs to Business Strategy
Figure 7.4: 3PLs demonstrate a strong ability to increase their clients’ customer retention levels, 2009
Table 7.7: 3PLs’ ability to achieve customer business strategies, 2009
7.6 3PL Contribution to Supply Chain Issues
Table 7.8: 3PLs’ ability to overcome its customers’ supply chain issues, 2009
Figure 7.5: 3PLs strategically contribute towards their customers’ key supply chain issues, 2009
7.8 Chapter Summary: Key Findings
CHAPTER 8 THE FUTURE OF OUTSOURCING
8.1 Purchasing Additional Services
Figure 8.1: One-in-seven customers will not consider purchasing additional services from their logistics providers, 2009
Table 8.1: Likelihood of 3PL customers purchasing additional services from their current 3PLs, 2009
8.1.1 Added-Value Services
8.1.2 I.T. Solutions
8.2 The Challenges of Employing a New 3PL
Figure 8.2: Customers seek to avoid the implementation setbacks of changing 3PLs, 2009
8.2.1 Implementation
8.2.2 Competitive Edge
8.2.3 Business Knowledge
8.2.4 Resources of 3PLs
Table 8.2: The major challenges faced when switching 3PL provider, 2009
8.3 Enhancing a Current 3PL Contract
Figure 8.3: Key focus of future 3PL service improvements, 2009
Table 8.3: 3PL Service improvements for the future, 2009
8.3.1 Relationship Compatibility
8.3.2 Cost Focus
8.3.3 Innovation and Value-Added Services
8.4 The Future of Existing 3PL-Customer Relationships
Figure 8.4: Two-thirds of customers would strongly consider renewing their existing 3PL contracts, 2009
Table 8.4: Likelihood of contract renewals with existing 3PLs, 2009
8.5 Winning New Contract Logistics
8.6 Chapter Summary: Key Findings
CHAPTER 9 APPENDIX
1.1 Decision Making – Business Logistics Activity
Figure 1.1: Logistics is often viewed as a ‘non-core’ activity, 2009
1.2 Strategic Planning – Supply Chain Outsourcing
Figure 1.2: Achieving a service/cost balance is most important when choosing a 3PL, 2009
1.3 Supply Chain Focus
Figure 1.3: Regional changes and increased outsourcing are top of the agenda, 2009
1.4 Customer Satisfaction with 3PLs
Figure 1.4: 3PLs demonstrate a strong ability to increase their clients’ customer retention levels, 2009
1.5 The Future of Outsourcing
Figure 1.5: One-in-seven customers will not consider purchasing additional services from their logistics providers, 2009
CHAPTER 2 INTRODUCTION
2.1 Research Objectives
2.2 Report Structure
2.3 Research Methodology and Data Definitions
Figure 2.1: Analytiqa primary research – manufacturer and retailer participation, 2009
CHAPTER 3 KEY ASSUMPTIONS AND ACTION POINTS
3.1 Key Assumptions
Decision Making – Business Logistics Activity
Strategic Planning – Supply Chain Outsourcing
Supply Chain Focus
3PL Customer Satisfaction
The Future of Outsourcing
3.2 Key Action Points
Strategic Partnership Approach
Technology Driven Supply Chains
Communication and Customer Orientation
The Rise of the ‘Added-Value’ 3PL
Effective Corporate Awareness Campaigns from 3PLs
CHAPTER 4 DECISION MAKING - BUSINESS LOGISTICS ACTIVITY
4.1 Logistics Expenditure
Table 4.1: Respondents’ annual logistics expenditure, 2009
Figure 4.1: Logistics expenditure is weighted evenly between large and smaller accounts, 2009
4.2 Logistics Budget Allocation
Table 4.2: Logistics budget as a share of annual company turnover, 2009
Figure 4.2: Over 60.0% of companies spend up to @6.0% of turnover on logistics, 2009
4.3 Logistics Outsourcing
4.3.1 Western Europe
Table 4.3: Western European logistics outsourcing rate (%) 2006-2008
Table 4.4: Western European contract logistics market growth (%) 2006-2008
Figure 4.3: Western Europe - manufacturers and retailers outsource around one-third of their logistics, 2008
4.3.2 Central and Eastern Europe
Table 4.5: Central and Eastern European logistics outsourcing rate (%) 2006-2008
Table 4.6: Central and Eastern European contract logistics market growth (%) 2006-2008
Figure 4.4: CEE region - manufacturers and retailers outsource over one-fifth of their logistics, 2008
4.4 In-house Logistics Activities
4.4.1 Drivers for Maintaining In-house Logistics Activities
Figure 4.5: Fear of losing control drives in-house activity, 2009
Table 4.7: Reasons for Operating Logistics Activities In-House, 2009
4.5 Outsourced Logistics Activities
Table 4.8: Outsourcing by logistics activities, 2009
Figure 4.6: Manufacturers and retailers commonly outsource their distribution function, 2009
4.5.1 Drivers for Outsourcing Decisions
Figure 4.7: Logistics is often viewed as a ‘non-core’ activity, 2009
4.5.2 Benefits of Outsourcing
Figure 4.8: Three major benefits of divesting your supply chain, 2009
Table 4.9: Key benefits of outsourcing, 2009
4.6 Using Third-Party Logistics Providers
4.6.1 Number of 3PLs used
Table 4.10: Number of 3PLs Employed, 2009
Figure 4.9: One-in-five companies employ between six and ten 3PLS where activity is outsourced, 2009
4.6.2 Outsourced Contract Numbers
Table 4.11: Number of outsourcing contracts over the past three years, 2009
4.6.3 Contract Lengths
Table 4.12: Trends in Outsourcing Contract Lengths Over the Past Three Years, 2009
4.7 Chapter Summary: Key Findings
CHAPTER 5 STRATEGIC PLANNING – SUPPLY CHAIN OUTSOURCING
5.1 Invitations to Tender
Figure 5.1: Over 70.0% of manufacturers and retailers approach up to six 3PLs per contract, 2009
Table 5.1: The number of 3PLs approached by manufacturers and retailers, 2009
5.2 Methods of Identifying Suitable 3PLs
Figure 5.2: Manufacturers and retailers favour ‘internal’ search and selection methods, 2009
Table 5.2: Methods of researching new 3PLs, 2009
5.3 Criteria for Choosing a Third-Party Logistics Provider
Figure 5.3: Achieving a service/cost balance is most important when choosing a 3PL, 2009
Table 5.3: Top criteria to consider during 3PL search and selection, 2009
5.4 Chapter Summary: Key Findings
CHAPTER 6 SUPPLY CHAIN FOCUS
6.1 Supply Chain Performance
6.1.1 Current Supply Chain Performance
Figure 6.1: 3PL users remain optimistic about their current supply chain performance, 2009
Table 6.1: Perceptions of current supply chain performance, 2009
6.1.2 Supply Chain Performance Trends
Table 6.2: Changes in supply chain performance between 2008 and 2009
Figure 6.2: 90.0% of 3PL customers have improved their supply chain performance from 2008 to 2009
6.2 Supply Chain Issues
6.2.1 Cost Transparency
6.2.2 Forecast Accuracy
6.2.3 Impact of Economic Climate on the Supply Chain
Table 6.3: Impact of global recession on supply chain operations, 2009
Figure 6.3: One-in-four retailers and manufacturers experience signficant effects to their outsourcing activity, 2009
6.3 Supply Chain Initiatives
6.3.1 Service Focus
6.3.2 Supply Chain Consolidation
6.3.3 Cost Control
6.3.4 Technology
Table 6.4: Current supply chain initiatives, 2009
6.4 Future Supply Chain Requirements
6.4.1 Outsourced Logistics – Short Term
Figure 6.4: Nearly one-half of 3PL users expect to make no significant changes to their supply chain in 2009-2010
Table 6.5: Outsourced logistics developments in 2009-2010
6.4.2 Supply Chain Strategy – Long Term
Table 6.6: Supply chain strategy over the next three years, 2009
Figure 6.5: Regional changes and increased outsourced are top of the agenda, 2009
6.5 Chapter Summary: Key Findings
CHAPTER 7 3PL CUSTOMER SATISFACTION
7.1 Defining the 3PL-Customer Relationship
Table 7.1: The types of 3PL-customer relationships, 2009
Figure 7.1: 3PLs are being recognised as supply chain partners, 2009
7.2 3PL Overall Performance
Figure 7.2: One-half of customers are merely satisfied with the overall performance of their 3PLs, 2009
Table 7.2: Customer satisfaction with overall 3PL performance , 2009
7.3 Performance Characteristics of 3PLs
7.3.1 Competences of 3PLs
Table 7.3: Assessing the strategic competences of contract logistics providers, 2009
Table 7.4: Assessing the service provision of contract logistics providers, 2009
7.3.2 Capabilities of 3PLs
Table 7.5: Assessing the strategic capabilities of contract logistics providers, 2009
7.3.3 Compatibility with 3PLs
Table 7.6: 3PL compatibility with their customers, 2009
7.4 Performance of 3PLs by Activity
Figure 7.3: Customer satisfaction with outsourced activities, 2009
7.5 Contribution of 3PLs to Business Strategy
Figure 7.4: 3PLs demonstrate a strong ability to increase their clients’ customer retention levels, 2009
Table 7.7: 3PLs’ ability to achieve customer business strategies, 2009
7.6 3PL Contribution to Supply Chain Issues
Table 7.8: 3PLs’ ability to overcome its customers’ supply chain issues, 2009
Figure 7.5: 3PLs strategically contribute towards their customers’ key supply chain issues, 2009
7.8 Chapter Summary: Key Findings
CHAPTER 8 THE FUTURE OF OUTSOURCING
8.1 Purchasing Additional Services
Figure 8.1: One-in-seven customers will not consider purchasing additional services from their logistics providers, 2009
Table 8.1: Likelihood of 3PL customers purchasing additional services from their current 3PLs, 2009
8.1.1 Added-Value Services
8.1.2 I.T. Solutions
8.2 The Challenges of Employing a New 3PL
Figure 8.2: Customers seek to avoid the implementation setbacks of changing 3PLs, 2009
8.2.1 Implementation
8.2.2 Competitive Edge
8.2.3 Business Knowledge
8.2.4 Resources of 3PLs
Table 8.2: The major challenges faced when switching 3PL provider, 2009
8.3 Enhancing a Current 3PL Contract
Figure 8.3: Key focus of future 3PL service improvements, 2009
Table 8.3: 3PL Service improvements for the future, 2009
8.3.1 Relationship Compatibility
8.3.2 Cost Focus
8.3.3 Innovation and Value-Added Services
8.4 The Future of Existing 3PL-Customer Relationships
Figure 8.4: Two-thirds of customers would strongly consider renewing their existing 3PL contracts, 2009
Table 8.4: Likelihood of contract renewals with existing 3PLs, 2009
8.5 Winning New Contract Logistics
8.6 Chapter Summary: Key Findings
CHAPTER 9 APPENDIX
