Incredible changes are currently redefining the path of moving goods from one business to another. As we continue to move into the future of B2B third party logistics and order fulfilment, what signs should we be paying attention to?

The challenges of dealing with the pandemic both revealed and accelerated opportunities in the supply chain. Combined with technological advances enabling the ability to drill down on specific customer needs, B2B 3PL partnerships have in front of them new paths to success on all fronts.

Let’s have a closer look at the challenges facing B2B 3PL operations, and how emerging technologies are providing solutions.

B2B 3PL Defined

To be specific, B2B 3PL is the process by which businesses outsource their order fulfilment, warehousing, shipping, and other logistics needs to a third-party provider.

This allows businesses to focus on their core competencies while leaving the logistics to the experts. Thanks to the rise of e-commerce, B2B third party logistics is a booming industry, with many businesses outsourcing their logistics needs to third-party providers in order to save time and money.

Differences Between B2B and B2C

A quick look at the interior of a related 3PL warehouse will give you a very good idea of whether an operation is B2B or B2C.

For example, a B2B fulfilment warehouse will tend to handle large items or irregularly shaped products on their way downstream through the manufacturing chain. A B2C warehouse on the other hand will often store large quantities of the same item such as FMCG products bound for retail store shelves, or multiple types of items in smaller quantities being prepared for last mile delivery.

With the ongoing evolution of the supply chain, unified supply chains are streamlining processes even further to include more wholistic B2B2C operations within some market segments. This provides complete control over the entire logistics process from intake of raw materials and manufacturing to final delivery.

Challenges Facing B2B Shipping

The major challenges in fulfilment faced by both B2B, B2C and even B2B2C, lie in the immediacy of demand for timely delivery of goods and the ability of logistics partners to keep up with operational needs.

“Only when fulfillment demands are met can a manufacturer plan for exponential growth”

Source: John Hayes: Director of Sales for Balyo USA as quoted in Forbes

From a 3PL point of view, a growing B2B client will not only require more flexible warehouse space, but the means to handle orders quickly, efficiently and accurately.

In the best of times, some businesses must have the ability to adjust to the massive roller coaster swings of seasonal trends. There are also labour issues, both of which tend to be relatively constant compared to the need for staying on top of technologies designed to make orders and tracking more efficient.

Like it or not, the pandemic spurred a 77.6% increase in e-commerce due to the need for safety and fuelled by convenience. 3PL providers had no choice but to adapt by proving themselves to be agile and more flexible than ever before. As we’ve seen in the last couple of years, the pandemic also exposed liabilities in a fragile supply chain that manifested in a shortage of truckers and empty store shelves.

With B2B e-commerce taking up more and more market share, and ever-impatient customer demands, business leaders find themselves with their hands full trying to navigate developmental challenges.

In general, the rapid growth of e-commerce has significantly impacted B2B shipping expectations and the logistics industry as a whole. With the rise of online shopping, businesses feel more pressure to ensure that their products are delivered quickly and accurately. This has led to an increase in demand for 3PL providers who can offer fulfillment services such as warehousing, packaging services, inventory management, and last-mile delivery.

Opportunities and Solutions

Wherever there’s a bottleneck in the supply chain, whether it be in the physical transportation of goods or in data management, there’s an opportunity.

“Companies are facing unprecedented change due to innovation, technology disruptions, and evolving customer expectations. Supply chains are becoming unbundled and customized to reduce costs and meet evolving customer needs. Logistics structures will also shift to more specialized solutions tailored to different customer segments, modes of transportation, and distribution networks.”

Source: KPMG Advisory on the Future of Logistics

If you drill down into the specifics of oncoming capabilities, the opportunities are staggering – and fully capable of becoming new market segments all on their own. Take for example the drone technology and fully automated vehicles which, quite possibly, could become the mainstays of  intelligent logistics.

Nonetheless, here’s an overview of some of the more immediate solutions both currently in use and on the horizon:

Automation And Robotics

Automation and robotics are revolutionizing the logistics industry, and by extension providing serious benefits to B2B shipping. Robotic process automation (RPA) and artificial intelligence (AI) are being used to streamline processes, reduce costs, and improve efficiency. Automated guided vehicles (AGVs) are used in warehouses to transport goods, while drones are being tested for last-mile delivery.

Big Data Analytics

Data is the new oil in today’s digital age. Big data analytics is a game-changer for the logistics industry. Businesses can use data to optimize their supply chain, identify inefficiencies, and make informed decisions. Predictive analytics can help 3PL providers to forecast demand and optimize inventory levels.

Sustainability And Green Logistics

Sustainability and environmental concerns are increasingly becoming critical issues for businesses. Consumers are demanding eco-friendly products and environmentally responsible practices. Green logistics is an approach that focuses on reducing the environmental impact of logistics operations. It involves using renewable energy, reducing waste, and optimizing transportation routes.

Personalization And Customer Experience

Personalization and customer experience are crucial in today’s consumer-centric world. B2B businesses are also starting to recognize the importance of providing a personalized customer experience. 3PL providers can help businesses to achieve this by offering customized logistics solutions tailored to their specific needs.

In Closing

The future is coming, some would say the future is already here. Either way one thing is for certain, there will always be advancements and challenges in B2B logistics. Moving forward, the dependancy on technology to provide solutions may be the answer, but benefits do not always come without associated costs.

Does your 3PL provider live up to your expectations and deliver what your company needs? Are they paying attention to the trends and demands shaping the future of your business? As a growing family owned company with operations in Brantford and Etobicoke Ontario, Brimich Logistics and Packaging is willing and able to serve all your transportation and climate controlled warehouse needs. Contact us today!

Want to better control warehouse, freight, and delivery costs? Having a robust supplier compliance process in place helps to eliminate contention, remove bias and maintain objectivity.

What is Supplier Compliance?

Supplier compliance is a program designed to ensure suppliers conform to a company’s set of standards, specific requirements and at the same time, adhere to local regulations.

Due to the growing number of suppliers and diversification modern businesses have access to, supplier compliance also allows you to level the playing field in terms of what you expect according to your own set of standards and expectations.

Compliance best practices can include anything from making sure your materials are legally and ethically sourced, to ensuring the associated workforce is treated well according to BSCI (Business Social Compliance Initiative) social compliance standards, and compensated properly for their efforts.

What’s the Difference Between Supplier and Vendor Compliance?

Suppliers are typically one of the first links in the supply chain, doing business primarily through B2B relationships. Because they are removed from the retail end of the supply chain, suppliers do business according to compliance regulations and requirements more related to manufacturing.

Vendor compliance on the other hand, is the set of rules that cover a retailer’s requirements when they purchase from a vendor. The retailer then sells to the general public as a function of B2C (Business to Consumer) commerce.

Why is Supplier Compliance Important?

Maintaining a predictable level of performance and deliverables from your suppliers by means of compliance is an asset in your own business’ ability to prosper.

With the world shrinking, or as some would say becoming more flat, suppliers are increasingly becoming more scattered around the world. While suppliers and vendors enjoy enhanced levels of accessibility, communication and collaboration, the situation also carries inherited risks.

A Lack of Compliance Equals More Risk

Due to the increase in exposure to potential problems, the need for supplier compliance and conformance to your company’s needs becomes that much more important.

For instance, materials that show up on your dock with missing data or unfulfilled prerequisite actions can have a serious effect on operations resulting in major problems downstream. Or inconsistent materials can lead to quality control problems and even regulatory issues.

Furthermore, the type of business may have more stringent adherence policies due to the nature of the products being produced. For example, in the pharmaceuticals industry, proper compliance may need to include GMP (Good Manufacturing Practice) certification which: “describes the minimum standard that a medicines manufacturer must meet in their production processes”. Source.

Supplier Compliance and Relationships

Traditionally, supplier relationships have been in the form of intimate alliances and partnerships that can, under certain circumstances, undermine a compliance policy.

Having a robust compliance process in place helps to eliminate contention, remove bias and maintain objectivity. This improves supplier performance and can be qualified through analysis of key metrics and data points.

A well-planned supplier compliance program will lay out consistent goals and parameters. With the help of monitoring KPIs, this helps you standardize internal procedures and improve the cost effectiveness of operations. Perhaps more importantly, it gives you an edge over your competition and increases profits.

What to Include in a Supplier Compliance Policy

The purpose of a supplier compliance policy is to essentially standardize incoming production form outsourced businesses while at the same time minimize risk and liability.

To help control supply chain blind spots, compliance management must develop policies that keep up with supply chain evolution. The ability to retrieve information for audit evidence must be integrated into the company management systems in order to generate timely reports.

Therefor, categorizing supplier information, operations and procedures into discrete elements allows a company to stay on top of supplier performance.

A robust management process involves monitoring and updating supplier metrics set out in a typical policy. For example:

1. Capability Assessment
   • The gathering of information that is specific to the supplier.
   • Verification of supplier information. This data should be instantly retrievable and kept current at all times.
   • Authorized supplier usage. Without sticking to a list of authorized suppliers, companies expose themselves to additional risks. Non-approved suppliers may offer more attractive buy-in price points, but may also not conform to quality control standards required for your business.
2. Supply Contract Management
   • Make sure clear policies and rules are in place so suppliers are fully informed as to what is expected.
   • Formalize your requirements through contracts and agreements. Leave nothing to chance.
   • Include controls and restraints. Make sure suppliers understand your company’s boundaries and processes that need to be followed.
3. Performance Monitoring
   • Accountability. Just because you continually monitor for effectiveness does not remove a supplier from their responsibilities of compliance and performance. Suppliers must not be lulled into complacency.
   • Auditing. While traditional physical audits serve their own purpose, technology can also be used to maximize efficiency and minimize down-time.
   • Measure KPIs. Key performance indicators allow you to measure the pulse of performance. Gather and analyze statistics that show whether desired targets are being achieved or not. These could be percentages that quantify successful delivery times, material quality and consistency or return rates.

Compliance and Automation

As companies evolve, corporate systems become more complex to the point where the cost associated with managing an effective compliance program can become less attractive.

No company likes the idea of manually reading every certificate of analysis (COA) and comparing it to the required specification. It can an impossible task often coming in different formats and sometimes arrive even after the shipment’s been received.

If a company is lagging in development, problem detection and early warning just don’t happen. In worst cases some item problems are detected only after the container has been opened on the plant floor

The solution is to implement software that monitors a supplier compliance according to corporate standards, regulatory and legal responsibilities.

Effective Strategy Through Policy

Of all of the strategies used by companies, supplier compliance is often a critical program used to control costs. A formal, well-defined compliance policy used with every supplier can provide accountability and lower warehouse, freight, and delivery costs. With additional benefits such as increased speed and accuracy, vendors receive better service and higher customer satisfaction.

In general, a good supplier compliance policy will allow vendors to implement advanced supply chain systems. In linear markets, this could be just-in-time inventory, source ticketing and tracking, and advanced shipping notices (ASNs), all of which provide greater efficiency.

First Mile Delivery Optimization

Compared to last mile delivery, first mile delivery isn’t getting nearly as much attention or resource investment to improve efficiency and visibility. You would think the first step in the delivery of your products would carry weight, and it does.

Being the initial leg of the journey an item will make in an individual company’s supply chain process, optimizing first mile delivery helps ensure customers are not lost due to unmet expectations, low standards or inconsistencies.

Additionally, there are the obvious benefits that come with having a better understanding of your operations which through the process of analysis, uncover opportunities to improve.

What is first mile delivery?

As the official kick-off to the transportation of goods across the first leg of the supply chain, the first mile could also mean different things for different industries and supply chains.

For example, as a retailer this could be delivering items from a regional warehouse to local stores or a local distribution centre. For logistics services, this could be the picking up of goods, and either:

• bring them back to their own warehouses (i.e. next day/distribution model) before the next leg of shipping or
• provide a same day or on-demand service – where LSPs pick up the order from the shipper, which then go out for immediate delivery to the consignee

As another example, the first mile for a moving and storage company would involve the pickup from the customer’s home or store, then delivery of the inventory back to the warehouse or storage site.

Or it could be something as simple as an eCommerce merchant dropping off individually packaged and addressed products at the local post office for the next link in the delivery chain.

In both cases, it involves loading and unloading shipments. It can also involve different drivers managing the same items, and items with more than one order ID – such items are often resolved manually by many 3pls.

Optimizing First Mile Logistics

Automation is the key to optimizing first-mile logistics processes. By applying the right technology, excess expenses can be converted into funds that help propel growth.

By examining first-mile operations through the lens of lean performance, opportunities can be realized such as more efficient truck loading and more predictable delivery times at the last mile of the supply chain.

Smart manufacturers take advantage of any opportunity to assess logistics and find ways to improve the speed of getting products to consumers. A deeper understanding of inter-logistical operations can produce wins such as better price-points for their customers, and a more competitive edge in the market.

From a human input standpoint, auditing tasks of the company’s workforce can provide insight into how hands-on tasks may become automated ones. And instead of being interpreted as lost jobs, these operational savings can be used to boost employee satisfaction by being seen as promotions in assigning them new and more complex tasks.

First Mile Delivery Processes and Hurdles

From the time a product is packaged and ready to enter the supply chain process, it begins its journey through the first mile of delivery. Here are a few of the most important elements to consider:

Visibility

Once a service provider takes a truckload from its warehouse, there is zero visibility as to where the order is without some form of tracking technology. This is particularly problematic for shippers of big and bulky goods, fragile, or expensive items.

Today, it’s possible to update your first mile shipping and first mile delivery experience using many of the same techniques that are applied to last mile delivery.

Inexperience

In the larger sense, shippers are customers too, and expect a great experience from their service providers – so why not give them the same treatment when their business orders are shipped? 

With the boom in eCommerce, businesses have been paying close attention to the last mile in recent years. In order to stay competitive in the online landscape, businesses have rushed to overhaul and expand their last mile fulfillment services.

In comparison, nothing substantial has happened in the first mile world. From the perspective of the full delivery experience, the first mile has been largely ignored. This is more due to the fact that product origination could be thought of like the trunk of a tree; a singular point of origination, whereas the points of destination would be the branches or even individual leaves in the case of absolute end-users.

However, it’s important to realize every aspect of the delivery experience plays a part in creating customer stickiness.

Technology and Digitization

For many, first mile delivery processes such as coordinating pickup times and matching shipment size to truck availability can be improved by digitizing the first mile delivery flow.

Larger companies have technology for optimizing first mile logistics. Small companies on the other hand, may have to adopt transformational processes, moving their entire supply chain from manual to more efficient digital operations. Depending on a company’s size, this can take more time and resources than they have available.

Can You Outsource First-Mile Delivery?

The short answer is yes. Unless your company also has its own fleet of delivery vehicles, the first mile is typically handled by suppliers and facilities through external third party carriers.

How Long Does First-Mile Delivery Take?

The time it takes to accomplish the first mile delivery will depend on how far your supplier is to your warehouse or fulfillment centre. It will also depend on the shipping method used.

How Much Does First-Mile Delivery Cost?

First mile delivery costs will depend on the size and type of your inventory and the shipping method used to transport it. First mile delivery optimization involves using cost-effective methods of ordering only as much inventory as you need, or shipping in bulk based on forecasted demand. This reduces the amount of overall capital associated with moving the inventory.