Have you heard many stories of outsourcing hell but very less of heaven?
Or are you considering the option of outsourcing your transport, warehousing, logistics or other supply chain operations, but feeling concerned about the level of risk involved?
Don’t worry, everyone gets anxious like this at times.
You’re not alone!
Making the decision of outsourcing your logistics can be a tough one. Perhaps you’re fearful and concerned that even after the prospect appears to be attractive, it might not prove to be the right option for your company. It can also be a possibility that you had already engaged in an outsourcing contract with a 3PL, but had to face many challenges with poor performance management, services, etc. Any of the above scenarios can come with the sense that an unbiased, external perspective would offer some clarity, and help one to make the right decisions that suit their business needs well.
But before we jump to the concerns, let’s first understand a few basic concepts of logistic outsourcing.
What is outsourcing logistics?
When a company uses an external logistic service provider to handle various supply chain functions is outsourcing logistics. These generally include a mix or process of shipping, storing, packing and/or delivering company’s goods i.e., from raw materials to the final finished product.
Note: The terms “outsourced logistics” and “third-party logistics” are roughly interchangeable — they refer to the same thing.
Today, many companies are opting to use outsourcing or third-party logistic providers (or 3PL) for logistics services, including transportation, warehousing, cross-docking, inventory management, packaging and freight forwarding. A 3PL relationship is a form of business process outsourcing focused mostly on the strategic operation of the client’s supply chain. Many companies are now outsourcing other non-core other important functions, such as accounting, IT, marketing, designing and now even human resources.
Although statistically speaking, about 85% of Asia Pacific region businesses outsource some part of their Logistics operations.
So does that mean you have to follow the same route?
Well, let’s find out!
There are many reasons why organisations outsource, like:
1. Cost savings with efficiency driven: With 3PL, one can cut down the need to invest in spaces & warehouses, adaption of new technological solutions, transportation costs, security & safety measures, labours & employees’ salaries. It helps companies to scale and use best operational practises in order to help companies increase their overall transportation management efficiency and cost savings.
2. Improved flexibility: Outsourcing logistics offers the benefit of flexibility which means that they can grow space, labour, and transportation according to the inventory requirements. They can also ease the transition between seasonal periods and adjust for industry fluctuation. Enjoy the flexibility in capacity, and variable cost, due to rising or falling customer demand
3. Access to technology: 3PLs advanced systems for its logistic functions like warehouse & transportation management allow companies to avoid buying any major software investments, programming and maintenance.
4. Risk management improvement: 3PLs helps companies to mitigate incidents and prevent any possible downtime. Some high tech software also gathers and analyses thousands of data from past events, current environment and future expectations to help businesses manage disruptions (like weather), reduce downtime, and effectively plan and budget their logistics spends and operations.
5. Customs assistance: Some 3PLs Use multimodal shipping services & logistics solutions, like combining intermodal with truckload and final-mile, helps mitigate capacity challenges and also fulfil delivery expectations of a customer. One-Stop-Service 3PLs like Logistics 9 have a varied range of carriers and transportation services that can be used to provide logistics solutions for your business.
6. Focus on core business: Outsourcing logistics helps companies to concentrate fully on their core business, it gives them enough time to improvise and develop their ideas, products & services and expand their business.
What to Outsource?
Outsourcing can be infinitely variable in terms of what is outsourced to whom and how. There are no hard and fast rules here at all.
The typical functions that are outsourced are these:
o Domestic & International Transport
o Shipment Consolidation
o Customs Clearance
o Reverse Logistics
o Product Labelling/Packaging
o Transport Management
o Supply Chain Consultancy
o Freight forwarding
o Customer Service
o Order Entry & Processing
o 4PL Services
Although, apart from above listed logistic functions Logistics 9 offer varied other services like:
o Quality check & Certification
o Offsite inspection & Virtual Tour
o Freight forwarding
o Branding & Marketing
o Product testing
o Photography & Videography
o Website building
o Graphic Designing assistance
o Create or change packaging design & much more.
What’s your service expectations?
It is always good to clearly state your expectations in terms of services from your outsourcing partner.
Be it cost, or delivery in full on time (DIFOT), transport utilisation or other measures, it would be easy for you to measure your current performance in order to analyse overall growth and development.
Whatever it is that you’re outsourcing; warehousing, import and export transportation or packaging or any other functions, it is very necessary that you clearly specify what your service expectations are going to be from your outsourcer and how you’ll measure these functions.
We hope you find the above information helpful and give you better clarity and insights to help you in making your decision for outsourcing logistics.
Interested to know more Logistics 9 and our unique features that not only suffice your logistic needs but also your branding and marketing needs, please reach us here.
For more details about contact us on +6591383999 or email@example.com