Since the outbreak of Covid-19, the demand for managed services such as third-party logistics (3PL) has seen significant growth because of remote working models being adopted by companies. In addition, we have seen a focus on the need to reduce fixed costs and take advantage of greater flexibility in costing models offered by 3PL.
According to research by ReportLinker, there has been a tremendous shift in focus towards managed services and their applications for both short- and long-term strategic decisions as companies shift focus onto their core business.
Tim Proome, general manager of Supply Chain Services at Tarsus Distribution, says 3PL eliminates the supply chain headache, allowing companies to focus on their core competency.
“The 3PL provider takes complete responsibility for a company’s supply chain requirements, with the promise of ensuring that business owners need never worry about it. The experts handle everything while the business concentrates on its core offering to customers. The result is a business that is more efficient, effective and productive. It’s also more profitable because of the improvement in customer experience.”
How have supply chain services changed over the past 12 months, given the impact of lockdowns and the restrictions placed on businesses?
“With our focus on third-party logistics and warehousing, we have seen a massive growth in e-commerce platforms during the course of the pandemic,” Proome says. “As an example, in mid-2020 we saw a 15% growth in volumes compared to Black Friday in the previous year – one of our busiest periods – because the government began to allow the purchase of technology for work and education purposes. This was accompanied by a massive shift to online procurement.”
Proome says e-commerce businesses have turned to 3PL to oversee and optimise their supply chain while the online stores focus on marketing and other business operations. “They are utilising 3PL providers to mitigate risk, increase efficiencies and ensure scalability,” he adds.
Helene Liebenberg, chief operations officer at Tarsus Distribution, points out that customers are now more concerned than ever with moving back to their core business and ridding themselves of non-core functionalities.
“This places a responsibility on Tarsus Distribution to ensure that we understand exactly what the customer requires,” she says. “That is why we continuously focus on improving our 3PL services, systems, and people. It means we have to be on top of our game all the time, which is what we pride ourselves on. The better we are able to digitally integrate into our customers’ systems, the better our offering to them is.”
Proome and Liebenberg agree that there is no such thing as ‘plug-and-play’ when it comes to managed services. Instead, each customer they have to find the most efficient processes to improve their overall operational performance.
”This requires in-depth expertise and experience as that is what enables insights into the customers’ real requirements,” says Proome. “The positive outcome of that is that we are able to pass on improvements to other customers wherever possible. Full digital integration of a customer’s enterprise resource planning (ERP) system into our warehouse management system (WMS) is the optimal solution and adds enormous value to the customer’s business.”
This integration affects all business processes, tracking and tracing every order, ensuring that all processes are working in tandem, and assisting sales, customer service, operations, and finance in making better, more strategic decisions.
3PL allows companies to outsource operational logistics from warehousing, all the way through to delivery and ultimately enables them to focus on other parts of your business.
Proome cites one example of the success of the supply chain system: after the Life Healthcare Esidimeni Tragedy, Tarsus Distribution was able to assist the Department of Health to roll out 2 500 devices, bundled with power pack SIM cards, and SD cards, and containing all the information required by the nurses who were able to go into the field without requiring antiquated paper-based solutions.
In another example, Tarsus Distribution facilitated a vendor-direct deal with one of the major universities to deliver 12 000 notebooks, preloaded with software, within one week, to four different locations.
“These kinds of demands from customers are driving us to evaluate our 3PL capabilities and skills all the time, so that we can continue to up our game,” says Liebenberg. “When it comes to providing the level of managed services required right now, optimisation never ends. It’s what our clients and partners depend on. We can all agree that the pandemic upended many things for businesses. By letting go and letting the experts handle non-core elements of the business, partners experience the most important benefit of 3PL services. They never have to worry about daily operations. Instead, they get to spend more of their time focusing on growing their business, and that is where the ROI comes in.”
Want to know more? Click here to read a great article on future trends in managed services.
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