Many companies outsource their supply-chain management to a third-party logistics provider (3PL). Unfortunately, this decision is not often made for the right reasons. The two reasons I hear most are:
- There was a promise of freight savings from the 3PL
- The company lacked the internal technology, talent and manpower to do it themselves
Lack of Supply Chain Talent or Logistics Technology?
We read many articles that talk about the lack of supply chain talent. That perception is driving many companies to look at outsourcing in hopes of leveraging the talent of a 3PL. In my opinion, supply chain talent is not as dire as many articles are portraying.
However, today’s supply chains have become more complex, requiring a better, more sophisticated logistics technology platform to run effectively. To make things more challenging, carriers are increasing pricing pressure on the shippers due to capacity limitations.
Yelling Louder Does Not Regain Control of Supply Chain Management
As a customer told me this summer, the strategy they used to deploy to combat all of this was to “yell louder.” That strategy doesn’t work anymore, so they had to find a new, more strategic way to solve the problems they were facing. We still see many 20- to 40-year industry veterans who are deploying the “yell louder” strategy to little success. When they look within their organization for help they aren’t getting any new strategies and I think it’s because the companies haven’t invested in the proper technology to create those strategies.
Thankfully, RateLinx has technology to help you regain control of your supply chain management. Many companies are starting to realize that having their supply chain management completely outsourced makes it hard to be strategic and are pulling their logistics back in-house. An intelligent in-house logistics strategy allows them to turn logistics from a tactical necessity to a strategic asset. By making logistics more strategic, companies are able to gain a competitive advantage in the market.
The Disadvantages of Using a 3PL
The two most common issues that arise when outsourcing logistics with a 3PL is a lack of supply chain visibility and information. The companies are looking at data that is so old that they have what we call “rear-time visibility.” This makes it impossible to quickly notice and correct problems in the supply chain. Also, the data is lacking many of the key order and item attributes that are required to provide the information they need to act strategically.
Companies are looking for software that will integrate all the data together (TMS, Freight Invoice, Order and Item information), standardize it and cleanse it. They want all of this done in real-time. This often has them looking at multiple providers and they find that very few, if any, 3PLs can deliver the required data in a fast and efficient manner. When they meet us and see that we can provide all of this with our Enterprise Solution, it can sound almost too good to be true.
The Advantages of Using RateLinx to Take Back Your Logistics
Companies that have moved from a 3PL to in-house logistics with our Enterprise Solution have been able to do it with very little investment in new logistics technology. The Enterprise Solution does many of the tactical tasks of collecting data, integrating it together, standardizing it and cleaning it. This saves our customers a lot of work, and allows them to view their logistics in real-time instead of “rear-time.” We can even customize their RateLinx Dashboard with various KPIs based on how they want to measure and monitor their logistics.
Our ability to easily customize our logistics solutions allows us to deploy the pieces of software required for the company very quickly (usually in 30-45 days). Most importantly, we only deploy the pieces of the RateLinx suite the company needs. This allows our solution to be used by companies of all sizes.
Not Just A Software Provider, A Strategic Logistics Partner
We are more than just a software provider; RateLinx is your company’s partner in creating a strategic logistics strategy. One of the most valuable services we provide is our rate modeling. Our rate analysts work with a company to run “what-if” scenarios on their freight so they can understand the financial impact of making a change in their supply chain. This is also helpful when a company is performing an RFP for one of their modes of freight. The RateLinx rate analysts will perform the analytics and provide the results to the company so they can see the often unintended consequences of their actions before they happen. With RateLinx, you can solve a problem before it becomes a problem.
Another way we are different from the other software providers is our automatic software update policy. Our software platform allows our customers to execute their logistics strategies and the last thing we want is to prevent a customer from using the latest version. That’s why we’ve created an auto-updater that provides an easy way for companies to ensure they are always working on the best, most current version of our software. With RateLinx, you’ll never have to worry again about the often painful and time consuming process of software upgrades.
If you’re ready to create a strategic in-house logistics strategy and regain control of your freight, don’t hesitate to contact me about how RateLinx can be your strategic logistics partner.