SCALA research finds only 18% of UK companies are satisfied with third-party logistics suppliers
According to new research from supply chain and logistics consultancy firm, SCALA, only 18% of UK companies are satisfied with their third-party logistics suppliers (3PLs). The survey, released this week, returned results from a selection of the UK’s best-known businesses and 3PLs with regards to customer satisfaction rates. Companies surveyed do business across a range of industries, but are primarily engaged in the grocery, FMCG, electrical appliance and homewares sectors.
The report discovered the existence of significant discrepancies between the satisfaction levels 3PL customers have with their third-party Logistics suppliers, and the perceived satisfaction rates of the 3PLs themselves. Common satisfaction pain points for businesses included a lack of proactivity from 3PLs, a lack of continuous improvement and a constant focus on cost instead of quality. 3PLs on the other hand, largely believed their clients were “very satisfied” with their services.
John Perry, managing director at SCALA, commented: “Two things are clear from this research. Firstly, customers of 3PLs need to be more vigilant in their approach to tendering, awarding and managing their 3PL contracts. Secondly, 3PLs should be doing more to increase satisfaction levels amongst their customers and identifying better ways to accurately gauge the state of their customer relationships.
“The key to achieving better synchronisation between 3PLs and their customers lies first and foremost in ensuring customers and 3PLs are aligned to successfully achieving the customer’s key business objectives. Once a contract is awarded, this then needs to be implemented through regular, formal review meetings, that look at objective measures of performance both of those business objectives and the detailed SLA logistics performance measures that are effectively communicated between both parties. Too often, KPIs are set at the outset and then consigned to a bottom drawer.
“Without reference to these measures of success, perspectives become based on informal discussions, hearsay and personal bias. KPIs provide both sides with the rare opportunity to step back and review the situation calmly and clearly. These also provide early indicators of when slight changes are needed to keep the relationship on track.
“These formal reviews are also an opportunity to review changes in business requirements and profile and for 3PLs to proactively suggest improvements and innovations that deliver on their expertise and added value.
“Bringing in external advisors can bring independent objective expertise to help businesses on both sides gauge the state of a partnership, outline any discrepancies and iron out pain points. While most companies go through tender processes perhaps every five years, with little experience beyond their own 3PL relationship, external advisors are constantly involved in the fruition of new partnerships and as such can offer key insight into how relationships should be upheld.”
DHL Claim Multi-Sector Collaboration Key to Fighting COVID
Since January, global logistics leader DHL has distributed more than 200 million doses of the COVID vaccine to 120+ countries around the globe. While the US and UK recently rolled out immunisation plans to most citizens, countries with less developed infrastructure still desperately need more doses. In the United Arab Emirates (UAE), which currently has one of the highest per-capita immunisation rates, the government set up storage facilities to cover domestic and international demand. But storage, as we’ve learned, is little help if you can’t transport the goods.
This is where logistics leaders such as DHL make their impact. The company built over 50 new partnerships, bilateral and multilateral, to collaborate with pharmaceutical and private sector firms. With more than 350 DHL centres pressed into service, the group operated 9,000+ flights to ship the vaccine where it needed to go.
With new pandemic knowledge, DHL just released its “Revisiting Pandemic Resilience” white paper, which examined the role of logistics and supply chain companies in handling COVID-19. As Thomas Ellman, Head of Clinical Trials Logistics at DHL, said: “The past one year has highlighted the importance of logistics and supply chain management to manage the pandemic, ensure business continuity and protect public health. It has also shown us that together we are stronger”.
Multisector partnerships, DHL said, enabled rapid, effective vaccine distribution. While international scientists developed a vaccine in record time—five times faster than any other vaccine in history—manufacturers ramped up production and logistics teams rolled out distribution three times faster than expected. When commercial routes faced backups, logistics operators worked with military officers to transport vaccines via helicopters and boats.
In the UAE, the public-private HOPE Consortium distributed billions of COVID-19 doses to its civilians as well as other countries in need by partnering with commercial organisations such as DHL. For the first time, apropo for an unprecedented pandemic, logistics companies made strong connections with public health and government.
“While the race against the virus continues, leveraging the power of such collaborations and data analytics will be key”, said Katja Busch, Chief Commercial Officer DHL and Head of DHL Customer Solutions & Innovation. “We need to remain prepared for high patient and vaccine volumes, maintain logistics infrastructure and capacity, while planning for seasonal fluctuations by providing a stable and well-equipped platform for the years to come”.
How Do We Sustain Immunisation?
By the end of 2021, experts estimate that we need approximately 10 billion doses of vaccines—many of which will be shipped to areas of the world, such as India, South Africa, and Brazil, that lack significant infrastructure. This is perhaps the greatest divide between countries that have rolled out successful immunisation programmes and those that have not. As Busch noted, “the UAE’s significant investments in creating robust air, sea, and land infrastructure facilitated logistics and vaccine distribution, helping us keep supply chains resilient”.
Neither is the novel coronavirus a one-time affair. If predictions hold, COVID will be similar to seasonal colds or the flu: here to stay. When fall comes around each year, governments will need to vaccinate the world as quickly as possible to ensure long-term immunisation against the virus. This time, logistics companies must be better prepared.
Yet global immunisation, year after year, is no small order. To keep reinfection rates low and slow the spread of COVID, governments will likely need 7-9 billion annual doses of the vaccine to meet that mark. And if DHL’s white paper is any judge of success, multi-sector supply chain partnerships will set the gold standard.