four out of five manufacturers surveyed …

… use a third-party logistics service provider (3PL), according to the latest research conducted by Accenture and Northeastern University. If that sounds like a big jump, it is. In just one year, the percentage of large manufacturers using 3PL services shot up to 83 percent from 65 percent the previous year (2002).

What's behind the surge? Part of the attraction for manufacturers is that outsourcing logistics activities frees them up to focus on core competencies like manufacturing processes, says Accenture Associate Partner Brooks Bentz. "In large part, they view outsourcing as an effective way of improving supply chain performance and reducing costs in segments of the operation not historically viewed as mainstream." And effective it must be. A full 85 percent of the survey respondents reported that using 3PL services had had a positive or very positive impact on logistics service levels (up 18 points from 2002), and 77 percent reported that it had had a positive or very positive impact on logistics costs (up 7 points from 2002).

One benefit 3PLs can bring to their clients' supply chain operations is integration: 57 percent of the manufacturers surveyed reported that their major customers were also using their primary 3PL provider, and 49 percent reported that their major vendors were using their primary provider. When asked how important these relationships were in promoting integration of the company's supply chain, more than two-thirds of the respondents termed it important or very important. "Clearly, 3PL users see significant benefits in sharing their primary 3PL providers with their major vendors and customers, and this constitutes a major market opportunity for 3PL providers to promote supply chain integration across company lines," says Professor Robert Lieb of Northeastern University's College of Business Administration and coauthor of the survey.