3PL & 4PL providers 'have critical role to play' - Capgemini

Speaking to Supply Chain Digital Editor-in-Chief Sean Ashcroft at Procurement & Supply Chain LIVE earlier this year, Capgemini Supply Director Ashley Naughton discusses the pivotal role logistics has to play in the future of supply chain.

Tell us of your role at Capgemini

Capgemini is a French multinational information technology services and consulting company. As director of supply chain transformation, I work with many different clients in numerous sectors to help them drive resilience and sustainability into their operations, largely through target operating model changes, process changes and technology enablement. That's really my focus of the organisation.

How can 3PLs and 4PLs help with supply disruption?

I think third and fourth party logistics (3/4PL) providers have a critical role to play, because they are often able to see disruptions early, particularly with regards to logistics routes. 

A lot of disruption that we've seen over the past couple of years has come through logistics issues. The Suez canal issue, for example, is a classic example of where transportation was severely affected. 3PLs and 4PLs are often best placed to analyse how such disruptive events might impact a company’s ability to deliver products and goods on time. In turn, this enables an organisation to assess how that impacts their own customers. 

So availability and access to logistics-routes data is really an area where I see they can add a lot of value.

Where does global logistics stand with digitalisation?

Logistics organisations are of course a key part of the value chain, and, as such, I think organisations need to work more carefully on collaboration. 
Many of the logistics companies are an important resource, because they are undergoing their own digital transformations themselves. Businesses need to work with them to understand how their digital transformations can add value to their own organisation. Only through collaboration will we see such benefits coming through.#

But not only do organisations need to collaborate with logistics companies, the logistics companies also need to collaborate with one another.

This is an emerging area. It isn’t happening enough at the moment but it will become more prominent going forward, particularly as regards sharing capacity. 

A good example is the delivery of goods and services. Traditionally, logistics will measure delivery ‘fill’. It doesn't necessarily always measure and monitor its return fill. Sometimes return vehicles don’t contain any products – so-called empty running. 

So there is definitely an opportunity for logistics companies to consider sharing capacity, in order to make the entire network more efficient. With the drive towards sustainability becoming more and more important, reducing the amount of inefficient transport moving around is definitely something logistics providers will seek to tackle, in my opinion.

Biggest barrier to digitalisation of supply chains?

Developing the business case for change is still a huge challenge for many organisations. Lots of businesses still tend to focus on the top- and bottom-line, which is understandable because that's how we're all measured. 

I think that migrating towards more of a value-driven assessment is required if an organisation is to start moving things forward in the right direction. #

And businesses – particularly those with limited investment capabilities – need to focus on the important aspects of their supply chains. Seeing past the immediate first tier can be a tricky one for a lot of organisations. 

Different sectors also face slightly different challenges but that insight is quite limited right now, and I think there is an investment from both the financial perspective and a resource perspective that will be needed to decide what you actually want to focus on within your supply chain.

I also think that skills and expertise – and the need to reskill the workforce – can also be a barrier; that's something that firms also need to be focused on. This is especially true right now because of labour constraints in the supply chain network due to the Great Resignation.

PROCUREMENT & SUPPLY CHAIN LIVE LONDON 2022

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