Outsource it all
By Staff -- Modern Materials Handling, 12/1/1999
Third-party logistics (3PL) providers are becoming operations far different than the low-tech public warehouses of old.And Bruce Mantz, director of operations at 3PL provider Automated Distribution Systems, Edison, N.J., is at the front of that sea change.
ADS supplies shoes to seven Sears' regional DCs as a 3PL provider. ADS offers just-in-time, point-of-sale replenishment services. Indeed, the old saying that "imitation is the sincerest form of flattery" applies to what Mantz and ADS have achieved. Modify the saying to: "Copy these strategies if you want to be competitive" with almost anything that private distribution can provide.
Many 3PLs already are highly proficient at moving goods and related data. "Trained people and technology are the two key factors," observes Mantz. "Third party logistics is a very people oriented business with a tremendous future ahead of it," he declares. "We keep up with technology to continually improve our levels of service." Clients of 3PL firms thus can focus on their core competency; retailing, for example.
Mantz, who previously spent 16 years in retail physical distribution, also knows the complexities of retail selling. A retailer-or almost any other kind of business - can turn its logistics operations over to a 3PL and benefit: The outsourcing firm can fix its distribution costs. It can increase order fulfillment accuracy. And it can tighten inventory controls, Mantz says.
3PL companies believe that the timely movement of information is just as important as the movement of materials, Mantz says. They can provide JIT distribution. They rely upon EDI transactions. They're ready to receive and send ASNs (advanced shipping notices) over the Internet, even if supply chain partners aren't so equipped just yet.
Mantz' experience illustrates what many 3PL managers bring to the table. He counts five DC retrofits or renovations in 1984-89 for retailer Macy's among the $50 million or more in distribution and materials handling projects he's worked on and supervised. He's also managed a project to build and start up a 500,000 sq. ft., state-of-the-art DC for Burlington Coat Factory.
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