Companies of all sizes choose to outsource activities and processes that are not part of their core business for a variety of reasons. In the past, cost reduction was a main reason for the decision to outsource. In addition to this aspect, however, more and more companies are also recognizing the numerous strategic advantages that outsourcing can offer.
In its latest global outsourcing survey, consulting firm Deloitte found that 59 percent of companies regard outsourcing as a tool to reduce costs.
However, almost as many respondents — 57 percent — said they chose outsourcing because it allows them to concentrate on their core business. 47 percent said that this would solve capacity problems.
Other reasons for adopting outsourcing, according to respondents, include improving service quality, meeting business-critical requirements, accessing intellectual capital, managing business environments, and driving against transformation.
What is most striking, however, is the growing awareness among companies of the value that innovation in outsourcing can offer.
Almost 60 percent of respondents said they use outsourcing innovations to increase quality levels. 44 percent can reduce delivery costs as a result and 38 percent improve the user experience.
These trends are clearly reflected in the world of 3PL providers offering outsourced transportation and supply chain logistics services, and are sometimes reinforced. In particular, 3pls' ability to help companies improve customer experiences has proven to be a driving force in the industry.
In its “State of the Third-Party Logistics Industry” report, 3PL Central, a provider of warehouse management software, documents the developments that have drastically changed the logistics industry over the past five years. “But of all the factors that triggered this upheaval,” the report states, “none was more revolutionary than the increasing demand for an outstanding customer experience.”
Other research confirms that 3PLs are helping their customers tremendously with cost savings and improved customer service. In the 3PL Central Report, 71 percent of 3PL customers said that outsourced services reduced overall logistics costs. 81 percent said using 3PLs resulted in improved customer service. In addition, 73 percent of customers said that their 3PLs offer them new and innovative ways to improve logistical efficiency.
One of the key findings from recent research in this area is the increasingly strategic nature of relationships between shippers and their 3PL providers.
Technology is of particular importance in this development. The increasing availability of data and more advanced tools for analyzing it enable real-time decision-making. They support the development of innovative solutions that customers can use to gain their competitive advantage.
When choosing the services to outsource, focus on the key points of your company:
When making decisions, start from a team. Every aspect of the business that is affected by outsourcing — finances, management, operations, sales, end customers — should be included in the process. This ensures that the right solution is found and that expectations are met.
Pay close attention to whether a potential 3PL partner is able to provide all transportation and supply chain logistics services you currently need and scale those services as your business grows and your needs increase.
Don't skimp on data during the search process. The more information you can provide to a potential 3PL partner, the better they can develop solutions and set prices that meet your needs.
