Build versus Buy: The 3PL Technology Dilemma

Historically, 3PLs have invested heavily in technology to provide better service to customers and to differentiate themselves from the competition.

A cornerstone of the 3PL IT suite is global supply chain visibility.

While in high demand from major customers, visibility systems present daunting technical challenges for even the most IT-fortified 3PLs.

One of the key challenges with global supply chain visibility systems is the intense need for transactional data - especially data that is locked up in the systems of supply chain partners that are scattered around the world.

These are complex, expensive systems that require significant capital investment and significant operational investment going forward over time.

The industry has now reached a mainstream point on the maturity curve for global supply chain visibility technology.

Commercial systems not only exist, they’re proven, and in use by major corporations in every industry sector. They address the number one business challenge that 3PL customers face: accurate and timely supply chain visibility.

3PLs now have a choice. Do I “build” or “buy” a visibility system? Many still feel it necessary to build their own systems. They feel they can do it for less. Or they feel that commercial systems cannot be customized to meet their unique needs.

Or they feel that by using commercial systems they’ll no longer be able to differentiate themselves from their competitors.

This paper will explore the “build” versus “buy” dilemma and make the case that while there was a time when 3PLs had no choice but to build their own systems, those days are now gone.

Today, leaders are rolling out commercial IT platforms that offer powerful and flexible functionality, and they are differentiating themselves through tighter process alignment and smarter strategy deployments with their customers.