In an increasingly competitive economy, businesses attempt to differentiate through focusing on creating value for its customers. Using logistics outsourcing to reduce costs throughout the supply chain, adds further value. However,to successfully leverage the benefit, it is important for businesses to assess the suitability of outsourcing against current core competencies to maintain and increase the level of customer value.
An outsourced network can bring all important flexibility and cost reductions to weather the ups and downs of volatile markets. Also, by consolidating volume, companies can utilise carriers’ economies of scale and achieve a more cost effective service as well as giving improved order visibility to customers.
Customer service stays top of the value chain so if service levels become less consistent or falls below previous standards then further outsourcing may not add value. In addition the use of internal fleet means firms have the opportunity to build a rapport with the customer creating a sense of loyalty. Therefore it is key that transition between internal fleet and outsourcing is managed in the correct way and relationships sustained.
The rise of Omni-Channel shopping has put further strain onto the supply chain with the level of individual customers rising. The obvious answer to this is to utilise carriers in order to ensure cost effective delivery. However, selection of carriers should not be underestimated and customer needs should always be considered critical to value creation.
The success or failure of any outsourcing strategy will often be dictated through the level of analysis conducted. There is no one size fits all solution to the decision on outsourcing and it is fundamental that all resources are considered when making an outsourcing decision.
At The Logistics Business we have extensive experience in logistics outsourcing ensuring clients make the correct decision for their business. Through bespoke analysis we can give clients confidence that outsourcing is the correct path for them to follow and differentiate them from competitors through increasing their value offering.