Building Supply-Chain Resilience Via Third-Party Logistics

1. What should you expect from a third-party logistics (3PL) relationship?

Most 3PLs will offer the basics such as rate savings, audits, transportation-management systems and reports. At KDL Logistics, basics are just the starting point. We dig deeper and utilize applied intelligence to get a 360-deg. understanding of our clients’ business processes and a better sense of where improvements can be made. We find that the basics rarely drive enhanced profitability.

2. What does the term “applied intelligence” (AI) mean?

This is KDL Logistics’ proprietary process which, supported by our market-leading technology, allows us to gather meaningful data and, through machine learning and the use of AI, make informed choices, optimize processes, improve efficiency and generate better customer experiences. We align with our customers strategically, drive accountability in their operations and provide next-level service. That often leads to adjustments to business processes, which are the real drivers of increased profitability. Applied Intelligence gives us the equivalent of an MRI of a client’s business to help pinpoint the sources of pain. 

3. What’s an example of a business-process change that drives profitability?

When evaluating supply-chain dynamics, our view is that the old mantra “if it ain’t broke, don’t fix it” is a recipe for failure in today’s market. For example, one of the first disciplines we review is freight policies. There are really two types of these policies. First, those designed to recover expenses associated with freight, aptly called freight-recovery policies. The second type, free freight, which we all have experience through Amazon, is designed to increase revenue by enticing people to purchase just a bit more to get free shipping. Not having these policies in place or having dated policies—results of having an “ain’t broke” philosophy—are common problems. These policies should change just as economic conditions do. By not adjusting, many companies are shrinking their margins and leaving money on the table. These policies need to be enforced, measured and consistently adapted to protect profitability. That’s something that KDL Logistics can set up for customers.