LOGISTICS OUTSOURCING
LOGISTIC ACTIVITIES IN OUTSOURCING
Outsourcing Logistic is an established practice as regards transportation (almost no company has its own fleet of trucks), while there are different attitudes in regards to warehouse management (housing and handling), that show by the way a lower tendency towards this operative practice compared to European trends.
Without any doubts, the decision to outsource your own logistics involves taking decisions that have a relevant and complex impact on the company: themes linked to logistical, commercial, financial, economic, ethical aspects shall be faced and their implications will influence the company strategy or its tactic. For this reason, choices are never easy to be taken and they require a well-structured analytical path to avoid mistakes, taking also into consideration that outsourcing your logistics is, as we already said, quite complex. It may however be more difficult to deal with the opposite process, in other words, to take back “home” your own logistics after a change of mind or a provider failure.
Outsourcing has many different shades (total or partial, speculative or strategic, short or long term etc.) the key point is to face the issue with the appropriate competence and experience; Simco has followed many projects for its customers both to verify the outsourcing opportunities or focused on the outsourcing implementation project, from choosing a supplier, to start-up assistance and to performance control.
TOGETHER WITH YOU SIMCO CAN:Evaluate the economic effectiveness, but not only, of choosing outsourcing for their logistics by comparing current costs (adjusted in case of an internal improvement process of the warehouse efficiency) to the ones expected from a 3PL (Third Party Logistics) company. During this phase all aspects, both positives and negatives, will be highlighted which can bring to the choice to outsource or not.
PLANNING ALL THE OUTSOURCING PROCESS STEPS AND SUPPORT COSTUMERS DURING THE FOLLOWING PHASES:
- draft of functional and technical specification of the tender for the service appointment
- definition of the price structure that the 3LP participating to the tender must follow
- identification of the KPI that will be used to measure the service quality expressed by the 3LP and to set a “rewards and penalties” system
- logistic audit of the interviewed 3LP, in particular on the sites where they are planning the service fulfullment. Collection, comment, standardization and technical/economical evaluation of the offer, support in the choice of the 3LP, support during the transformation phases and during the start-up of the outsourcing activity.
LOGISTICS SERVICES IN OUTSOURCING: THE METHOD
Feasibility study
First, it is necessary to exactly know the real costs of housing and handling and the consequent service level; after that, considering the operative needs and the company forecast concerning logistic aspects, we evaluate a series of alternative hypothesis, such as, for example: reorganization of the existing warehouse, realization of a new partially outsourced unit, entrust the warehouse to a 3LP. The comparison between different situations allows the company to identify the best option, quantifying costs and savings, and identifying transformation phases and timing.
Support to the realization
The company will plan the realization steps and timing and it will then follow all the processes: from the identification and choice of the logistic Provider (through the identification of technical, performance and contractual aspects of the outsourcing service) to the organisation of the moving and the start-up phases.
Periodical efficiency checks
After the commissioning, we verify the real result achieved and all the causes of the possible deviations from the expected results. We then plan new targets to be achieved, with logics of “continuous improvement”.
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