Supply chain disruptions were plentiful in 2022, and they’re projected to continue into 2023 and beyond.
Disruptions forecasted to continue or increase include operational and technological risks, strategic risks, legal, regulatory, and compliance risks, and financial risks.
The main issues affecting global logistics and supply chains stem from politics, economics, and ecology.
Given today's turbulence, the typical logistics and supply chain dynamics are more adverse than normal. Hence, we have the New Normal.
Because of the game-changing supply chain disruptions, operating solo as a shipper has become untenable. In fact, it’s become precarious.
That calls into question whether you have the right 3PL/4PL for the New Normal. Specifically, is it equipped to manage the disruptions of this new operating environment?
The dynamics have changed (we covered those in our last post). So, it makes sense that different criteria should apply in choosing a 3PL/4PL.
This post will look at the capabilities required to manage these enormous challenges. And that will inform the selection criteria you should focus on.
The majordisruptors pressuring supply chains listed above present shippers with enormous challenges. Conducting business as usual won’t work anymore. That means you must pivot in a major way—now.
An article in Forbes cites four ways to address these disruptors: “…through technology, partnerships, new customer strategies, or a focus on new markets.”
Looking at the major risks you face in 2023 helps to make clear the criteria you should apply in choosing a 3PL/4PL.
Technology is at the forefront of resolving today’s logistics and supply chain challenges. The advancement of technology has made this a leading solution given today’s confusion and volatility.
A 3PL/4L with robust capabilities will allow you to:
These capabilities are must-haves. Organizations that have these capabilities will enhance your business’s agility and resilience. They can take your business to the next level in an orderly manner if properly applied.
So, one vital criterion in choosing a 3PL/4PL today requires technology and expertise.
It’s a given that there’s strength in numbers. This axiom is true more than ever.
Partnering with a 3PL/4PL is not just expedient, it’s essential to success.
Globalization, specialization, and an increasingly competitive landscape challenge even the most adept shippers. This increases complexity. You’ll have more success in tackling these challenges with a partner.
But just any partner won’t do. You need a 3PL/4PL that is reliable, efficient, and affordable. You need a 3PL/4PL with a proven track record. It must deliver reliable, consistent, effective, and efficient services.
More important than that, you should look for a 3PL/4PL that is focused on your business. Customer-centricity is a strategic attribute of the New Normal. It’s changed business in a way that can make a difference between success and failure.
But there’s another often-overlooked criterion: “employee-friendliness”. That’s right, employee-friendliness, like customer service, has become a strategic differentiator.
New work consisting of remote work, work in the office, or hybrid work has changed the workplace. The best and the brightest will gravitate towards organizations that embrace new ways of working. Employees have choices, and they will vote with their feet.
As you consider outsourcing your logistics operations, you shouldn’t overlook employee-friendliness.
As the New Normal takes hold, if you haven’t already done so, you should evaluate new customer strategies. This takes on many forms.
First, in taking a strategic view, you’ll want to look at your customer strategy. You should compare it to today versus what you think it needs to be tomorrow. There are no set number or types of strategies. Here are some possibilities to consider.
These are broad goals that you should deconstruct. Again, many possibilities exist for each goal. What you come up with should be tailored to your needs.
Next, you will want to identify what you can do in-house and what you can outsource. To improve customer service, you might consider improving your product returns process.
Then, you’ll determine whether to do that in-house. With the increasing complexity of logistics and supply chains, you would likely want to outsource this function.
That brings us to which organization you should outsource to.
To find partners, go back to your criteria. Specifically, assuming you agree, you would seek a 3PL/4PL that delivers reliable, consistent, effective, and efficient services.
Further, they should have a track record of performance. Examining a track record will give you insight into their ability to deliver what you need. At the strategic level, you’ll want a 3PL/4PL that is agile, resilient, and affordable. And it should also be customer- and employee-friendly.
That’s your starting point. Now we’ll look at choosing a 3PL/4PL that can assist you in focusing on new markets.
Your business is operating in a different world. It’s more competitive. It’s riskier. And it has changed the old ways of doing business forever.
To remain competitive, you will likely want to diversify and expand your business. Exploring new markets is one way to grow your business. Demographics are changing, and so are buying patterns. So you’ll need to consider those impacts on your business.
Seeking new markets in which to do business is an excellent way to do that.
Going at it alone will make your job tougher. The obverse of that is, you guessed it, to partner with a 3PL/4PL. Doing that would simplify the accomplishment of your goals to enter new markets amid supply chain disruptions. After all, entering a market entails levels of complexity you may not be equipped to manage.
If you’re considering entering new markets, you must address logistics support.
First, you’ll want to use the general criteria set out above. Then you‘ll need to drill down to determine whether a prospective partner has the scope and scale to support your entry into new markets.
This is not an all-inclusive list. It’s not intended to be. Rather, it highlights the levels of complexity involved that you should consider.
You must do your homework in choosing the right 3PL/4PL. That starts with your strategic view of what you want to accomplish, aided by the criteria listed above.
You would then further refine those criteria into relevant support criteria.
Seeking a qualified 3PL/4PL that can operate seamlessly in the New Normal is critical to your mission accomplishment. Therefore, you should invest the time upfront to identify your specific strategic goals and objectives and then match them to the capabilities required to support those goals and objectives.
Taking a systematic approach helps to simplify choosing a suitable partner. It also makes this undertaking less stressful and less time-consuming.
At American Global Logistics, we’re positioned to support our clients to survive and thrive in today’s turbulent times. The transition is underway whether you’re ready or not.
We’re ready because we’ve prepared ourselves. We adapted when we saw that a new era was coming. More importantly, we’ve applied our own experience in transitioning to the New Normal to support our clients successfully.
That’s what separates American Global Logistics from the rest of the pack.
We want to do the same for you.
Contact us today to find out how we can help you thrive in today’s turbulent times.
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