Earlier this week, I wrote about how logistics executives are looking for “flexible” solutions to manage their ever-changing operations. The use of temporary labor — either directly or via third-party logistics (3PL) providers — is one example. Using temporary or contingent workers enables companies and 3PLs to flex their operations up or down as needed. Last June, the US Labor Department reported that there are 2.7 million temp workers in the country — the most ever and growing 10 times faster than private-sector employment. And according to a June 2013 Time article on the temp labor industry, “1 in 5 manual laborers who move and pack merchandise is now a temp.”
Simply put, the use of temporary labor is widespread and important in logistics, which is why SAP’s acquisition of Fieldglass caught my attention. According to the press release:
Fieldglass’ cloud-based Vendor Management System (VMS) allows organizations to better procure and manage their flexible workforces, including contingent labor and services managed through Statements of Work…The world’s leading companies, including GlaxoSmithKline, Johnson & Johnson, Monsanto, and Rio Tinto, rely on Fieldglass to gain visibility into complex services spend, improve worker quality, enforce corporate and external compliance and realize greater contingent workforce program efficiencies.
I don’t know if Fieldglass has any clients in the 3PL industry, but logistics service providers certainly have a need for this type of solution, especially those with warehousing operations. It wouldn’t surprise me if SAP started marketing this solution to 3PLs in the near future, bundling it with its warehouse management system (WMS), for example.
(It’s worth noting that there are negative aspects to the growing use of temporary labor, including low wages and safety concerns, as the Time article and this August 2010 story in the New York Times point out.)