Cupertino, CA -- (SBWIRE) -- 09/25/2013 -- Ultriva’s Founder and CEO, Narayan Laksham commented on a recent article that reported eighty-six percent of Domestic Fortune 500 companies use 3PLs for logistics and supply chain functions. Laksham noted on the company’s blog, “That is a significant enough number to make me pause. The report entitled “Trends in 3PL/Customer Relationships - 2013” leverages Armstrong & Associates’ proprietary database of 6,398 3PL customer relationships to provide detailed information on the top outsourcers to 3PLs, trends in service demand, and 3PL market size by vertical industry segment from 2005 through 2013.”
According to the report, General Motors, Procter & Gamble, and Wal-Mart each use 50 or more 3PLs. The report also quantifies the Global Fortune 500 3PL market at $250.2 billion, a 67% increase since 2005. Within the Global 500, “Technological” industry 3PL customers spent $66.8 billion with 3PLs in 2012 and are on track to spend $71.1 billion in 2013. The compound annual growth rate for Technological 3PL revenues was 9.3% from 2005 to 2012. “Electronics, Electrical Equipment” companies led all Technological industry sub segments with over $25.7 billion in 2012 3PL spend.
The average customer is utilizing each 3PL for just under three different logistics services with Transportation Management being the most frequent service utilized. Of the total 6,398 3PL/Customer relationships, 1,184 or 18.5% are strategic with the 3PLs performing supply chain management and/or lead logistics provider services. While these strategic relationships were dominated by Automotive and Technological industries in the past, there are increasing numbers of strategic relationships within the Retailing and Industrial industries.
Laksham observed, “In the last few years alone, I have seen a huge increase of SKUs. Look at the Apple Ipod or now the Iphone with the abundance of colors. Ultriva believes that this 3PL is part of a transformational strategy. With several changes in the market – an explosion in the number of FG SKUs, more and more configurable options based on customer demands, shorter lead times - companies are moving towards a Demand Driven Manufacturing model with a need to build a Demand Responsive Supply Networks.”
To read the entire blog, go to: http://web.ultriva.com/ultriva-blog/bid/96729/Explosion-of-SKUs-and-3PLs-Transform-Demand-Driven-Supply-Chain.
Ultriva (http://www.ultriva.com) empowers leading industrial, automotive, healthcare, aerospace, and defense businesses to operate more effectively and collaboratively by providing real time visibility and targeted actionable intelligence into inventory and material flows. Ultriva’s cloud-based platform leverages and seamlessly integrates with leading ERP and MRP systems, to deliver an end to end pull based replenishment model for a wide variety of industry sectors and enterprises such as ATK, CareFusion, Emerson, Ingersoll Rand, McKesson, Magellan, Regal Beloit, Thermo Fisher and more. Few Commercial-off-the-shelf (COTS) software solutions meet the requirements of Oracle users who turn to Ultriva’s Supply Chain Cloud solution, an Oracle Validated Integration solution. Ultriva is a privately held, growing software company based in Cupertino, California. Follow Ultriva on Twitter at @Ultriva.