Contact us

Search
Close this search box.

How 3PLs Can Avoid Making Rash Investments in the Race to Keep Pace

Categories

Share

How 3PLs Can Avoid Making Rash Investments in the Race to Keep Pace

July 11, 2022

How 3PLs Can Avoid Making Rash Investments in the Race to Keep Pace

ARC Advisory Group Taps Open Sky Group’s Alan Prillaman for a More Rational Approach to Modernization

Prefer to watch the webinar (27:10)? Click here

E-commerce purchasing habits have spiked markedly, from the start of COVID-19 to the present. Consumers buying online have come to expect 24- to 72-hour delivery on everything from color TVs to cheap sunglasses. This direct-to-consumer pattern shows no signs of abating.

As a consequence, 3PLs serving retail clients are now carrying safety stock onshore and examining new, fancy automation solutions to keep up with their partners’ customer order fulfillment promises. Demand for warehousing services is causing organizations to hire more workers. And management is on the lookout for new ways to preserve or increase ever-thin margins.

According to CBRE’s U.S. Real Estate Market Outlook for 2022, “3PLs led industrial leasing activity in 2021 (and) will expand further in 2022 as companies look to reduce direct logistics costs.”

Careful Investment Can Provide Options

With pressures plentiful and resources scarce, ARC Advisory Group interviewed Alan Prillaman, Vice President of Client Services for Open Sky Group, to ask what 3PLs should be investing in today to remain competitive for tomorrow.

Prillaman cautioned that leaping into automation, in response to ongoing labor shortages, increasing consumer demands and shorter cycle times, might not always be the best way forward.

Listen to what was said in this quick 0:47 audio clip.

Open Sky Group · 3PL – Careful Investments can Provide Options

Not All Automation Is Preferred

So, what type of automation makes the most sense?

Prillaman cited the difference between high-cost, long-term physical automation (such as automated storage and retrieval or conveyor systems) versus lower-cost, flexible digital automation (such as voice-picking or warehouse and labor management systems).

Where physical systems represent a longer-term ROI, leveraged against rotating, short-term client contracts, digital automation (systems) can be leveraged across a broader client base and be easily upgraded over time, leading to a quicker payback.

Prillaman elaborated on the benefits of digital automation in this 1:17 audio clip.

Open Sky Group · 3PL – Not All Automation is Preferred

Look Before You Leap

The first step, before spending money, is to assess your current environment. According to Prillaman, 3PLs should maximize what they currently have before incurring new expenditures. For instance, a state-of-the-art, cloud-based warehouse management or labor management system, if used correctly, can illuminate opportunities for maximizing travel times in the warehouse, improving pick efficiencies or aid in seasonal labor forecasts.

He suggested a restrained approach to automation adoption. Listen to his explanation in this 2:00 audio clip.

Open Sky Group · 3PL – Look Before You Leap

Find What Fits

3PLs serving multiple clients from a single warehouse can particularly benefit from a “go slow, spend low” approach. Prillaman emphasized investing in today’s more proven, lower-cost automation options, such as autonomous robots, goods-to-person systems and pick-to-light systems that apply to multiple applications, and can reduce training time, drive quality and keep headcount in check.

The key is choosing automation that fits your specific type of operation, inventory mix and financial risk profile. Hear why in this 2:57 audio clip.

Open Sky Group · 3PL – Find What Fits

With technology moving so fast, it’s easy to get caught up in the race to keep pace. But as listeners to the ARC-Open Sky Group, online discussion learned, “shiny objects” abound. Sometimes, a more deliberate, calculated approach to modernization can pay greater dividends in the long run.

Related Articles

It’s time to elevate.

Discover how Open Sky Group
can help you reach new heights
of supply chain efficiency.

Jeremy Hudson

Vice President of Client Services

Jeremy’s focus is on the products and services clients need to stay competitive. Open Sky Group’s mission is to deliver technology-enabled solutions that allow our customers to achieve more while having the flexibility to adapt to change. Jeremy lives the core values and mission by bringing the best experience possible to our clients. He is an essential member of implementation teams, working alongside clients, and encouraging them to use innovation and best practices instead of customizations for success.

Jason Yantiss

Vice President of Client Services

Jason provides leadership to a variety of teams focused on implementation and integration. With 27+ years of experience holding operational and technical management roles in transportation, billing, and warehousing across a vast array of industry verticals, Jason is adept at driving multiple complex projects, understanding customer needs at all levels of the operation and providing viable solutions. Jason’s resume of 150+ implementation projects include Warehouse, Labor, Transportation, Yard Management and multiple AR/AP Freight Pay and Customer Billing systems. 

Eric McPherson

Vice President of Client Services

Mac works to oversee implementation and integration projects. A former Marine officer and military police officer, he brings over 27 years of supply chain experience, including 11 years at Blue Yonder in both delivery and service sales. Mac is a dedicated, team-oriented professional with a background in business management, professional services, customer service, and supply chain technology. His specialties include sales support, supply chain execution systems, project management, fulfillment operations, distribution operations, and GSA contracts.

Shannon Caflisch

Senior Vice President of Sales and Marketing

Shannon is responsible for the strategy and management of all sales, business development, and marketing programs. With over 25 years of sales experience and 15 years focused in the supply chain space, Shannon focuses on building strong relationships with clients and partners and strives to deliver the right software solutions to help conquer supply chain challenges. Shannon believes in learning by listening to understand clients’ goals, struggles, and what is important to their business to build lasting, successful relationships.

Alan Prillaman

Senior Vice President of Client Services

As Senior VP of Client Services, Alan oversees all consulting services and account management at Open Sky Group. Possessing over 30 years of combined industry and consulting experience, Alan leverages his unique background in IT, logistics, quality management systems, manufacturing and distribution operations, and facility and strategic account management to provide clients with creative resolutions to complex challenges. His core philosophy and passion are to deliver tangible value for and establish long-term trusted partnerships with our clients.

Mike Noble

Senior Vice President of Technology

As Senior Vice President of Technology, Mike leads Open Sky Group’s Managed Services, Software Services, Infrastructure Services, and Information Technology teams bringing 35+ years of experience in Supply Chain Execution and Information Technology. Mike and his teams ensure we maintain the highest levels of customer service in a secure and reliable environment, constantly reviewing and evaluating new technologies, their appropriateness and applicability so we can safely and securely transact our own business – and help our clients accomplish the same.

Chad Kramlich

CEO

Joining Open Sky Group in 2015, Chad, served as Chief Revenue Officer for three years prior to his appointment to CEO in 2022. With over 25 years of experience delivering results for high-growth software and consulting organizations, Chad is leveraging his background in building efficient and effective implementation teams, establishing high-impact services operations, achieving revenue growth, and deepening executive-level client relations to help propel Open Sky Group into a very successful future.