Better Visibility Along The Transport Chain

Many companies use third-party logistics providers to manage some aspects of their inbound and outbound shipments. But most still manage the bulk of procurement and planning functions involved in their transportation and shipping processes themselves.

FedEx Supply Chain Services Inc. and Cap Gemini Ernst & Young would like to change that. The companies last week partnered to add to FedEx's shipping services the ability to monitor shipments, analyze performance, and improve customers' visibility into FedEx's transportation and distribution network.

Even companies that have good relationships with third-party logistics providers may believe "the providers aren't the right partners for more strategic initiatives, like procurement and optimization," says Noha Tohamy, a senior analyst at Forrester Research. According to a Forrester survey of 52 execs at companies with more than $500 million in revenue, 67% say they rely on third-party providers to move freight and 42% outsource the management of their warehouses and distribution centers. But only 17% outsource all transportation functions. For Unilever N.V., logistics planning and provider selection "are key processes and cost drivers that we want to maintain control over," says Chuck Irwin, director of transportation for Unilever's home and personal-care division.

The Forrester survey found that 56% want third-party logistics providers to improve technology-service offerings. FedEx and Cap Gemini Ernst & Young's service is designed to create a one-stop shop for planning, procurement, and execution. It's based on an integrated system of Global Logistics Technologies' transportation-management software, Yantra's fulfillment-management software, BridgePoint's supply-chain event-management software, and webMethods' software for a business-to-business hub.

Customers will be able to track shipments at the stock-keeping-unit and serial-number level across multiple warehouses and moves, says Douglas Witt, president and CEO of FedEx Supply Chain Services, a subsidiary of FedEx Corp. Says Witt, "Lack of visibility is a major issue for a lot of customers."