A conversation with Jeremy Shapiro, professor of operations research and management emeritus in the Sloan School of Management at the Massachusetts Institute for Technology.

An elite group of just 25 3PLs increasingly dominate logistics outsourcing around the world, and that is just how their customers like it. This closed club promises to become even more exclusive in the years ahead as acquisitions concentrate the power among fewer but larger 3PLs.

Despite the obvious differences between software developers and the customers they serve, fundamentally they too are running businesses. Quite aside from the 'winning' qualities of their products, these companies need sound business practices to ensure profitability quarter after quarter.

Thousands of hours and millions of dollars are spent each year by retailers and CPG companies to resolve conflicts and discrepancies caused by mis-matched and out-of-date item data. Now, all that is about to change.

In a perfect world, the tight coordination of systems and processes would allow goods to flow continuously from manufacturer to customer. With total understanding of consumer demand, who needs a lot of excess product taking up valuable real estate? • Second in the Best Practices series.

Relying in part on point-of-sale data, this software improves merchandise assortment, boosts total sales and helps increase average selling prices.

Point of sale is "where the facts are" that help retailers readjust orders to accommodate sales peaks and valleys that may be predictable but aren't always intuitive.

For "complexity masters," the world can be a dependable supplier and profitable market. But lackluster business performance is an unpleasant side effect for companies ill prepared for globalization and mounting value-chain complexity.