LONDON--(EON: Enhanced Online News)--According to the latest procurement intelligence report from Technavio, the global 3PL services market is expected to grow at a CAGR of more than 5% over the next five years due to the difficulties in handling the vast geographic presence of supply chain operations driven by globalization.
“The growth can also be attributed to the lack of internal expertise to manage logistics activities, this has driven demand for specialized third-party service providers”
The research report titled ‘Global 3PL Services: Procurement Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The growth can also be attributed to the lack of internal expertise to manage logistics activities, this has driven demand for specialized third-party service providers,” said lead Technavio procurement expert Angad Singh, specializing in research on category spend intelligence. “Buyers of 3PL services focus on transactional relationships with suppliers for repetitive services, whereas they focus on collaborative partnerships for strategic services such as IT-intensive and customer-centric activities,” added Angad.
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Cost saving opportunities in the 3PL services market
The adoption of cost optimization levers can help buyers of 3PL services realize cost savings and achieve category management and value benefits (including a reduction in procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the 3PL services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
The use of AR in freight handling allows suppliers to obtain important freight information such as weight, destination, and content, helping them speed up delivery processes and improve the ways in which objects are handled. It is a direct or indirect view of the real-world environment in which computer-generated inputs such as sound, videos, and graphics augment elements.
Drones are UAVs that can be controlled either remotely or programmed to fly in a particular path. Drones are utilized by 3PL companies to deliver small packages to customers and help suppliers reduce significant amounts of transportation costs.
Optimization of procurement practices saving aspects
Service providers are increasingly automating complex manual processes, especially in warehouses, to improve productivity, minimize fatalities, and enhance efficiency.
Buyers prefer to enlist 3PL providers that help manage transportation costs, especially while dealing with ocean and air freight costs.
Bundling of services saving aspects
Cloud-based analytics platforms can help buyers track inventory on the go, conduct what-if scenario analysis to minimize risks associated with global supply chains, and help in demand-supply planning.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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