Beyond The Hype Cycle

Beyond The Hype Cycle: Why Emerging Tech Isn’t The Only Route To Success For 3PLs

Given that the modern third-party logistics (3PL) industry is powered so much by technology, it’s perhaps no surprise that emerging tech always seems to capture the imagination.

When something new like AI or robotics reaches what Gartner calls the ‘Peak of Inflated Expectations’, the perception abounds that existing technology investments are already outdated or redundant.

But that’s not the case.

While the tech conversation is very much zeroed in on emerging technology, workflows in the 3PL sector around the world are still mainly paper based, or recently digitalized with existing, established, supply chain technology.

There is nothing wrong with that. Indeed, for many companies, it doesn’t make sense to go all in on emerging technology without having the capabilities in place to implement it successfully. Gartner’s latest Hype Cycle for Supply Chain Planning Technologies highlights technologies like mobile sortation robots, indoor flying drones and transportation forecasting that are entering their peak of inflated expectations right now.

The future potential of these technologies is certainly exciting – something Honeywell can speak to – but there is also a need for 3PLs to be able to identify, deploy and maximize the right technology investments for them, right now.

The challenges 3PLs need to address now

While the 3PL industry is growing worldwide, it still faces numerous headwinds – tech talent and truck driver shortages, unprecedented consumer demand, inflationary pressures – that mean resources are not infinite. Not every company can - or should - invest in AI right now.

And even where resources do exist, we are still at a very early stage in the hype cycle for many of these emerging technologies, with AI as the prime example. The emergence and accessibility of ChatGPT has understandably made AI the topic of choice for many industries and businesses, not least in third-party logistics.

But the lay of the land has not been clarified yet. There are lots of emerging players when it comes to vendors, many untested solutions, and a general bloat in the market, which will inevitably become more streamlined as the technology matures, and adoption does with it.

There are both labor and security aspects to this as well. Currently the pool of talent qualified to implement and use emerging technologies is smaller, which makes recruitment and onboarding a more complex and costly process. And there are ongoing concerns around data privacy and confidentiality when it comes to the use of AI in particular that 3PLs cannot afford to take a chance on.

Today before tomorrow: The technology that can make a difference for 3PLs now

Some 3PLs may be on a better footing to navigate these challenges and harness emerging technology right now. But for those who aren’t, this doesn’t mean the end of the world. Indeed, it can pay off in the long run to focus on investments which can pay dividends for the 3PL workforce now, in partnership with industry expert solutions providers.

As we can see, jumping on the bandwagon of emerging technology isn’t always necessarily the right choice. And in fact, for 3PLs, there are tested, tried, and trusted technologies available right now that can arguably have a more positive immediate impact in solving most pressing challenges of the industry.

To tackle everything from rising consumer demand to talent shortages and the need for efficiency, 3PLs should look to leverage:

  • Mobile computersscanners and wearables: these handheld and wearable devices give 3PL warehouse workers, truck drivers and last-mile employees flexibility, insight and speed to boost productivity, and also reduce TCO for 3PL companies.
  • Warehouse execution systems WES technology gives 3PL leaders advanced insights, underpinned by data science, to optimize decision making, reducing process inefficiency, and avoiding productivity bottlenecks
  • Labor management software LMS solutions provide on-demand intelligence to measure, manage and plan labor resources for increased productivity, efficiency, and overall facility performance in 3PL operations.
  • Automation and robotics: These solutions enable 3PLs to ramp up the effectiveness of palletizing and depalletizing, improving employee safety, filling resource gaps, and accelerating the speed of 3PL operations

Make the most of now while planning for tomorrow

None of this is to say that AI doesn’t have great potential implications for the 3PL industry. But placing a greater emphasis on maximizing the value of existing technologies can help 3PLs build future-proofed supply chains and make the most of now while laying the foundations to take advantage of emerging technology tomorrow.

By partnering with experienced, industry-expert providers, 3PLs can avoid the pitfalls of investing in untested, still-developing technologies, instead harnessing the short- and long-term benefits that come with established, dynamic and innovative technologies.