Logistics 2012 3pl Study

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2012 THIRD-PARTY LOGISTICS STUDY
The State of Logistics Outsourcing

Results and Findings of the 16th Annual Study

2012 16Th AnnuAL ThIRD-PARTY LOGISTICS STuDY

Contents

4 7 15 23 33 41 44 48 50

Executive Summary Current State of the 3PL Market Emerging Markets Electronics Talent Management Strategic Assessment About the Study About the Sponsors Credits

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©2012 C. John Langley, Jr., Ph.D., and Capgemini. All Rights Reserved. no part of this document may be reproduced, displayed, modified or distributed by any process or means without prior written permission from Capgemini. Rightshore ® is a trademark belonging to Capgemini.

www.3plstudy.com

Balance is the state of equilibrium — a continuous and sometimes evasive quest for supply chain executives — and the theme of this report. Whether they’re exploring emerging markets, navigating the challenges of the electronics supply chain or in finding the right talent, attaining equal and satisfactory distribution of resources is an ongoing challenge.

Supporting Organizations

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2012 16Th AnnuAL ThIRD-PARTY LOGISTICS STuDY

Executive Summary

This report presents findings of the 2012 16th Annual ThirdParty Logistics Study, based on research conducted in mid-2011. In addition to documenting the ongoing evolution of the third-party logistics market, this year’s report also takes a close-up look at three special topics: – The logistics of operating in emerging markets – The unique challenges facing the electronics supply chain – For the first time in the study’s history, the report considers the implications of talent in the supply chain and in shipper-3PL relationships Effective with this report, we are branding each Annual 3PL Study in terms of its first full year of circulation following the report’s annual October release. Therefore, this report constitutes the 2012 3PL Study.

Current State of the Market
Survey responses from 1,561 industry executives and managers representing users and non-users of 3PL services, as well as responses from 697 3PL executives and managers, confirm that 3PLs continue to provide strategic and operational value, provide new and innovative ways to improve logistics effectiveness and are key contributors to shippers’ overall business success. Total logistics expenditures represent an average of 12% of shippers’ sales revenues, and of this, an average 42% is devoted to outsourcing. Metrics relating to logistics cost reduction, inventory cost reduction, and logistics fixed asset reduction remain consistent with the two previous years’ studies. A majority of shipper respondents, 64%, are increasing their use of 3PL services, while 24% are returning to insourcing some 3PL services and 58% report they are reducing or consolidating the number of 3PLs they use. Logistics activities most frequently outsourced continue to include those that are more transactional, operational and repetitive, while those that are more strategic, customer-facing and IT-intensive tend to be less frequently outsourced. A similar phenomenon is present in expectations of 3PLs’ IT capabilities; execution-oriented activities and processes such as transportation and warehouse/DC management-related IT capabilities are more in demand than those that are more strategic and analytical. 3PLs continue to rank their relationships with shippers a bit higher than shippers do, but the vast majority (88% of shippers and 94% of 3PLs) view their relationships as successful. Openness, transparency, and good communication as well as agility and flexibility contribute to this success. Interestingly, figures from this year’s study suggest decreases in the use of gainsharing and collaboration.

Emerging Markets
A substantial 80% of shippers and 77% of 3PLs in the survey conduct business with or within an emerging country — nations with economies that are...
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