Consumers’ mindset of ‘instant gratification’ has forced logistics providers to streamline its processes.
With today’s technology, a few clicks or taps are all that separate us from anything and everything our hearts desire. But in reality, those new shoes or the bag of pet food are likely hundreds of miles away. How it gets from point A to point B is of little concern to the consumer. They just want it as soon as possible with very little sympathy towards third-party logistics providers and that means the pressure is on more than ever to deliver.
As consumers, the minute we hit the ‘place order’ button, we no longer care about the next steps; all we care about is seeing that new book or gadget at our doorstep quickly. But for manufacturers and distributors, third-party logistics providers (3PL) are the critical cog in the wheel of ‘instant gratification.’
Our world is dependent upon the supply chain, but often, we don’t really know how it actually works. Luckily, 3PL’s like Illinois based NOTS Logistics have spent years innovating ways to get faster and more efficient for the consumer.
Why 3PL is Essential to Consumers’ ‘Instant Gratifications’
Third-party logistics, or 3PL, is an organization’s use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services.
Back in 1981, Tom Kirchner started out buying a single truck to move goods; about a decade later, he expanded the family business into warehousing so that he ‘had something to put on the trucks’. That avenue quickly grew and expanded into workforce management, customized distribution, and property management.
Forty years later, his son, Andy Kirchner has continued to keep the family business alive as CEO of NOTS Logistics, a family-owned customized supply chain solution company in Illinois with over 4-million square feet of warehouse space with a service area that spans the Midwest.
The company recently has expanded to include staffing services, printing, and truck repair.
“[My father] instilled a set of values into each member of his family—do the right thing, work hard, give back, invest and help one another,” Kirchner told CEO World. “Those values have become the cornerstone and building blocks of NOTS Logistics. Today, our family has carried on this legacy, taking what we’ve learned from our father and expanding the business by leveraging resourcefulness, expertise and values to continue to grow and positively impact our community, co-workers and customers.”
Kirchner describes 3PL as the “bridge” between two entities–manufacturers and consumers. “Consumers may think they don’t care about 3PL, but they do, quite a bit,” he emphasized.
In the context of consumers, this means that when you order that new office chair, rug, or laptop charger, you are getting it exactly when and where you expect it. “In today’s era of ‘I want it now’, 3PL has only become more essential,” Kirchner says.
“Most people expect that bathrobe they ordered to come in two days! Our industry has embraced this ‘just-in-time’ mentality to meet the expectations of modern-day merchants and consumers.”
Debunking ‘Last-Mile’ Delivery
For a world dependent upon the supply chain, Kirchner says that there is very little sympathy towards the supply chain and only high expectations.
“You have that huge specter over your head of why things are being delayed…from the vaccination rollout to anything else, every industry is impacted… but a good company will look at this as an opportunity to seize. We know things are going to get squeezed and compressed. We just have to have more flexibility.”
One of the biggest myths surrounding logistics companies today involves ‘last-mile delivery,’ one of the most critical aspects that consumers overlook.
“All the best planning, from manufacturing to the development of a product, to transportation from a warehouse to a hub means nothing if you can’t get it to the point of sale,” Kirchner emphasizes. “The point of sale is everything. People worry about how it gets from the manufacturer in China to the West Coast. And then it’s got to get to the Midwest. Then from a train to a truck. Then from a truck to a hub. Then a hub to a retail store for the final point of sale. Last-mile is so important because that’s the revenue generation point in many cases. No one gets paid until that consumer buys it. The importance of that last segment, that’s oftentimes overlooked as one of the most critical aspects of the supply chain.”
Part of that challenge is understanding that both manufacturers and sellers are getting “squeezed.”
Manufacturers are getting ‘squeezed’ when trying to get their product out the door; sellers are getting ‘squeezed’ because they don’t have enough product on the shelf, and everything is on backorder.
“So, with everyone getting squeezed, where do all the fingers point?” Kirchner presents.
The supply chain.
“The manufacturer says ‘it’s out of my hands’ and ‘I gave it to the supply chain to get it from Point A to Point B eventually;” and the seller is saying the same thing:
The manufacturer says ‘it’s made and I’ll get it to you ASAP,’ so they raised expectations. There’s not a lot of latitude from manufacturers or end-users. Traditionally, that’s the way it has worked, and during the pandemic, it’s even more extreme.”
Understanding Pandemic-Supply Shortages
While the COVID-19 pandemic has started to give the U.S. a bit of a “break” when it comes to mask-wearing and social distancing requirements, there has certainly been a shift in how 3PL providers such as NOTS approaches rapidly increasing consumer demands.
Indeed, the core tenets have remained the same in serving customers, treating employees well, and maintaining strategic alliances, Kirchner says that logistics has “absolutely evolved to meet the expectations of modern consumers; the expectations are high and continuing to evolve is an absolute requirement.”
With the pandemic increasing demand but decreasing supply, questions such as ‘how do you transport it?’ or ‘how do you have ready-made staff available’ and ‘are all staff protected’ arise.
“Warehouses are limited, carriers are limited, so we have to look at how we react to shrinking timeframes. It comes down to effective communication, aligning with your shippers and end-users and trying to figure out how things can not be delayed.”
The Future of Logistics in a Post-Pandemic World
Looking to the future, logistics and manufacturing have forever changed, with the world forced to go digital or be swallowed up whole by competition.
Back in February, President Biden signed an Executive Order for his first 100-days in office, evaluating the logistics and supply chain sectors. So, what have we learned to date?
#1 – You Can No Longer Hide From Tech
You’ve heard it before–it’s not IF you get attacked, it’s WHEN. Our world has been in its most vulnerable state since as early as World War II, yet that didn’t stop the flood of cybersecurity attacks that targeted hospitals and vaccine distributions.
“Technology [no longer] allows you to hide, so you have to be a quality supply chain provider,” Kirchner says. And that includes our own national and local medical suppliers.
“We should take advantage of any opportunity to improve the nation’s logistics and supply chain sectors,” Kirchner says. “I believe technology will be a key over the coming years. More specifically, tools like geospatial tracking provide the power to find answers in real-time. One of the great takeaways of the past year is that powerful new virtual tools allow businesses to operate even in the face of physical obstacles.”
The past year has shown logistic companies the necessity of being strongly aligned with warehousers and transportation companies. “You have to adjust your workforce and processes, while being hypersensitive about how you inventory. These changes have made people realize that having a strong partner in the middle, or an experienced 3PL provider is a game-changer.”
If we’ve learned anything from this pandemic, it’s that the expectations have certainly been raised, with little wiggle room or latitude from manufacturers or end-users. “Traditionally, that’s the way it works, and after this COVID-19 pandemic, we are a world dependent on the supply chain.”
Despite what some believe as an extreme vulnerability to vaccine distribution, Kirchner says that these cybersecurity attacks we’ve seen over recent months “won’t affect the overall supply chain,” adding that if the supply chain is ever disrupted, that is a major problem, but as of now, the major suppliers have all planned for these types of vulnerabilities with added capacity that has been brought on.
#2- Understanding the Type of Supplier You Are
“You have an obligation through a strategic alliance or some sort of contractual obligation to perform services. Whether or not you can live up to them is dependent on the type of supply chain provider you are. There’s a differentiation between certain types of providers. Accepting the responsibility as a quality company heavily factors into the ability to back up what you say. Otherwise, your reputation is going to be ruined. You have to deliver upon the expectations set in front of you.”
#3 – You Have Less Time to React, So Be ‘Adaptable’
There’s a new normal from a worker’s perspective. Before the coronavirus, you would give somebody a work assignment and say I’ll have work for you at 8:00 in the morning.
Now, it comes in at all hours. You have to be flexible, adaptable. You have to have safety-sensitive protocols in place. You have to still be cognizant of the hours-of-service rule. The supply chain is quickly evolving to a world where you have less time to react, you have higher expectations to keep the supply chain from being disruptive and you have to be more sensitive to workers’ needs.
Plus, you still have to do this all while maintaining solid relationships with shippers, receivers and everyone else.
Today’s 3PL’s are taking on more responsibility to get goods to consumers. Quality logistics providers will adapt and find new ways to meet today’s consumer demands.
Andy Kirchner is President and CEO of NOTS Logistics, a customized supply chain solution company with over 4 million square feet of warehouse space headquartered in Southern Illinois.