The first step in deciding whether to insource or outsource warehousing and distribution is to define your exact operational goals after doing an in-depth analysis of your own particular current situation. Know what you are asking for. There are different levels of outsourcing available, not all will suit your requirements. You can consider one of these:
Advantages of outsourcing your distribution:
One of the main reasons cited for outsourcing is that you can focus on your core business and leave specialized services to the experts. Other “hard” reasons are the reduced need for capital investment in plant and equipment and possible savings in the cost of maintenance and repairs. There are other “softer” benefits that can’t be easily quantified such as less staffing headaches and not having to be an expert on the supporting technology.
Over time, following a period of growth, or international expansion, many companies may be required to select and outsource some of their fundamental Supply Chain operations, to a third-party- provider.
The EII has significant experience in outsourcing third-party- providers, specifically so, the outsourcing of logistics services providers (LSPs) or 3PLs. 3PLs offer customers the possibility to outsource logistics services for the complete range of supply chain functions and needs.
A popular choice, and a useful resource once correctly integrated into a company’s Supply Chain, 3PLs do however require an initial detailed sourcing and selection process, including the final negotiation and contract agreement. This process of negotiation is referred to as: Tender Management; for which EII have worked in the bid-teams of leading logistics service providers, and on behalf of numerous major clients, within the procurement of logistics services.
An additional service we offer is 3PL contract reviews.
It can be very tempting when you already have a logistics service provider and are looking for cost reductions to carry out a tender process for “benchmarking” purposes. The thing to remember is that it often takes significant time and resources for a 3PL to respond during a tender process.
Regularly running “benchmarking” processes with no intention of changing provider will risk damaging relationships with 3PLs they may even stop responding to your future requests.
The alternative is to review your existing contract and operation to identify where there is potential to find efficiencies. We can help you to carry out contract reviews when what you are looking for is a reduction in logistics costs rather than a change of provider.
EII can help you to manage your suppliers and operations to achieve the most value from your logistics functions and overall supply chain.
At EII, we have successfully completed projects to help Organizations to make appropriate and compliant international supply chain arrangements, getting the right results at the right cost.
International trade regulation and best practice are highly complex, potentially risky, and subject to frequent and significant changes.
Due to the level of complexity, opportunities are often missed, and so this is an area in which a small initial project can lead to significant savings. This presents challenges in managing effectively and in ensuring compliance with all relevant legislation.
Furthermore, the supply chain for a single product may have multiple stages across a number of different countries and trading blocs. For these reasons the advice of EII, able to keep abreast of ever-changing developments, can be a valuable resource.
EII can help to determine if you are paying the right price for your international freight movements. We can also help you to look at the range of possible solutions and providers on offer, identify those that are most appropriate to your requirement, run an effective procurement process and manage the ongoing provider relationship to avoid common issues.
Working with one of our expert consultants we are able to provide professional advice on imports, exports, customs / bonded warehousing, International distribution service and logistics solutions.
Customs, Import, Export and Logistics is the part of the supply chain processes that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customs and customers’ requirements.
As the logistics community moves towards the complete integration of the supply cycle, the need for understanding the whole process grows. Understanding how the freight flows, where it is at any time, knowing possible choke points and possible problem spots benefits not only the shipper but also the logistics providers, to maximize the use of resources.
Due to advancing globalization, declining trade barriers and an increasingly mobile workforce, the transport and logistics industry continues to enjoy above average growth. By expanding Service offerings both upstream and downstream, transport companies and logistics service providers are also becoming masters of their supply chain, both forward and backward. International growth through acquisitions, joint ventures and alliances are also reshaping the industry.
Under these conditions, new corporate strategies and processes are required and we can assist in all of the following areas:
