Supply Chain, Transport, Logistics Outsourcing Consultants In the s, 80s and 90s, it became increasingly expensive and complex for these companies to handle the warehousing and the transport themselves. Logistics Outsourcing Trends and Statistics What are the basic statistics and trends in the outsourcing industry? Of course some companies may try outsourcing for a period of time and then decide, for various reasons, to move those services back in-house. However, for many shippers—especially those exploiting the ecommerce explosion—outsourcing has become the only sensible logistics solution.
Established metrics with historical performance measurements. The benchmarking team should be comprised of the best and brightest from Quality, Finance, IT, Sourcing, and Operations. A bold statement, which prohibits asterisks or caveats, will equalize the competitive playing field.
Not all 3PLs are equal in their quality of project management, technology, and leadership. Gainsharing and activity-based contracting can lead to effective 3PL partnerships. Gainsharing is a mechanism that can reward, on a prorated basis, both the company and the 3PL for delivering savings.
It can be particularly effective in reaching, and even exceeding, "stretch" targets. Activity-based contracts can tilt benefits toward the company, particularly in cases when customer demand is volatile or seasonal. While the company might enjoy minimal costs during periods of low volume, the 3PL can easily become disenchanted by an irregular—especially an unpredictable—revenue stream.
Interesting project scope and value-added services discussions generally follow these conditions. It is generally very complicated and very costly to get out of a multi-year deal with a 3PL that is well integrated into your business processes.
Always have a contingency plan. SELECTION The selection step assumes not only that the preceding steps have been executed, but also that you and your management feel good about all the previous assessments and development work.
At this point in the process, some well-known companies have split their outsourcing award, or assigned sites between two lead 3PL companies.
We are convinced that this leads to supply chain fragmentation and inordinate confusion. The selected service providers must be intimate and integrated with you to gain the greatest benefit, and to achieve the promise of outsourcing.
The only valid premise for selecting multiple service providers is one in which each would have clearly defined roles and responsibilities, based on their capabilities and geographic presence, in a three-way relationship with the company.
Implicit in the selection step is the development of an explicit company-CEO and 3PL-CEO bond, in which they co-develop common visions and objectives for the outsourcing initiatives. Here are some Golden Rules to keep in mind as you plan and proceed with implementation: Implement on a full fiscal year calendar cycle unless business needs are compelling.
Plan early and often, and do as much as possible beforehand.
Site conversions are almost always rushed. Build in operational and business case contingencies for unforeseen delays that could dilute or delay savings realization. Take the longer view on where to house 3PL project leadership, placing them where the real action is.
They can lead on the floor, but they can only follow from headquarters. Logistics outsourcing is a major cultural integration, whether you manufacture and distribute or simply distribute as you go to market.
It may be the only practical way for you to satisfy the service needs of your customers as the pace of competition steps up. Remember to keep the options orientation, do a world-class job of baselining, choose a 3PL as if you were selecting a spouse, and build multi-level organizational bonds within the 3PL partnership relationship.
Prior to joining TPG, Randy spent 23 years in logistics, finance, sales, marketing and customer service positions within the General Electric Company.Logistics Outsourcing. Let Jaguar Logistics be your single source solution for your company's courier and logistics needs.
With our dedicated team of logistics specialists, your company's transportation needs are covered from start to finish. Whatever challenges you are facing, Jaguar Logistics has a customized solution to add value to .
Logistics Outsourcing (4PL) can be defined as the strategic use of outside parties (business independency) to perform activities traditionally handled by internal staff and resources. Allyn allocates resources to your company in order to manage your supply chain.
What is Outsourcing? Can you give us a brief introduction to supply chain and logistics outsourcing? Outsourcing is using an external supplier for services to a company that cannot provide them for itself, or cannot provide them in an efficient way.
Logistics outsourcing is a major cultural integration, whether you manufacture and distribute or simply distribute as you go to market. If your company's business strategy, capitalization, or reinvestment ratio do not lead to investing in logistics processes and technology annually and in a major way, outsourcing can make more than good sense.
Logistics Outsourcing Risks. There are huge potential benefits from outsourcing. There are also huge potential risks associated with each of the four major steps in outsourcing: Strategy, Selection, Implementation and Management.
Outsourcing strategy is the process of determining whether or not to outsource and, if so, what to outsource. Logistics outsourcing is a major cultural integration, whether you manufacture and distribute or simply distribute as you go to market.
If your company's business strategy, capitalization, or reinvestment ratio do not lead to investing in logistics processes and technology annually and in a major way, outsourcing can make more than good sense.