It’s not easy being in charge of a company’s supply chain. In fact, it’s harder than it’s ever been. Customers continue to get more demanding and unpredictable - they want things their way. Shippers are trying to keep up. But their existing operations are built for the “old” customer expectation of greatness - not on what today’s customers are looking for. And traditional third-party logistics services providers are also falling behind, making it difficult to find capacity. So where do shippers turn?
The answer is what Accenture calls XPL. XPL is the new operational mindset required for companies to excel in today’s age of continual disruption, which Accenture has dubbed Industry X.0—the digital reinvention of industry. In Industry X.0, “X” signals that change is no longer linear, and companies should identify the most effective combination of new technologies and processes to power their digital reinvention. Similarly, the “X” in XPL means the next step beyond 3PLs isn’t an incremental, linear change in logistics (4PL) but, rather, an x-factor-level of change, powered by new capabilities and technologies, that supports the broader company’s reinvention.
In an upcoming four-part blog series, we explore the emerging concept of XPL and how it can help companies create a new logistics operation for today’s and tomorrow’s demands. We start with a hypothetical example that show what XPL could look like in action.
Meet Joe, the head of logistics for a global manufacturer. Two years ago, he was in a tight spot. Over the previous decade, he had built a solid, scalable, and repeatable supply chain to support the company’s complex business. This included handling two distinct flows:
But the company’s business was changing rapidly. With ecommerce exploding, the number of distribution channels had multiplied and order types and quantities were evolving as well. Joe could no longer focus on just truckload shipments to a warehouse. Instead, he found himself increasingly dealing with smaller-quantity shipments and a variety of non-traditional delivery modes that were just as important to meeting customer demand (which often included expectations for same-day delivery). Joe knew he had to maintain and meet the requirements of the company’s traditional distribution channels as well as those of the new channels that look nothing like what the company was built to respond to. But how? He couldn’t simply continue to tweak the existing logistics network because the dynamics of the business demanded something completely different.
Joe eventually discovered his answer in the form of a new approach to logistics, fueled by digital, that enabled him to transform his fixed network into a fluid, “intelligent” one. Today, working hand-in-hand with a new type of logistics services provider, Joe can leverage technologies such as analytics and artificial intelligence to know at a glance what demand and transportation capacity look like across the business anywhere in the world. He can craft strategies for moving product using both traditional 3PLs and a wide range of alternative transportation options that have become part of the company’s new service-provider ecosystem. And he can keep tabs on emerging vendors with promising new technologies or capabilities he could use to further improve his logistic network’s efficiency and responsiveness.
By introducing a revolution in how logistics operates, Joe has positioned his company to excel at a time when customer demands, channels, and delivery needs are threatening the livelihoods of other established companies that are struggling to keep pace.
While Joe’s experience isn’t real, XPL is. In the next installment of this series, we look at some of the major challenges that XPL can help companies address.