The following article is
published by the International Warehouse Logistics Association
WHY OUTSOURCE LOGISTICS?
One of the best recognized and
analyzed trends in business today is the trend toward outsourcing. We at IWLA
feel that this trend bodes well for the future of the warehouse logistics
industry because we represent an attractive option to establishing a costly and
perhaps hard to staff logistics function within all but the largest
manufacturing and marketing companies. The main drivers behind this trend are:
Re-focusing on core competencies. A company which manufactures computer chips
has as its core competency manufacturing computer chips. Certainly, they have
internal functions such as accounting, marketing, MIS, etc., but one costly and
hard to staff function may be logistics. Rather than invest in warehouses and
warehousemen, trucks and truck drivers, etc., the company may find logistics to
be one of the easiest competencies to outsource, and one of the most financially
attractive. In other words, the company may choose to partner with one or more
3PLs (third-party logistics providers), or perhaps one 4PL (those who coordinate
the efforts of a series of 3PLs) to relieve themselves of the burden of
logistics in-house. Then, they can re-focus on what they do best, making
computer chips. "Bottom line" concerns. A dollar that does not need to be spent
maintaining in-house warehouse facilities, fork lifts, trucks, etc. is available
to drop to the "bottom line." While companies are busy focusing on what they do
best, making and marketing their products, they can save logistics dollars by
partnering with those who do logistics best, largely IWLA member companies.
Technology advantages. 3PLs
today are investing in technology as never before. From warehouse management
systems software to environmentally friendly fork lifts, workstations replacing
clipboards to barcode scanning equipment and RF devices, today's successful
warehouses need to stay on top of the latest technology and employ it wherever
it suits their needs. It's their business, and manufacturing and marketing
companies may not have the access or budget dollars required to invest their IT
dollars wisely.
As you begin or continue your search for a warehouse
logistics company, remember that outsourced logistics is a partnership between
you and your provider. As your relationship with your warehouse logistics
provider develops, you will see first-hand the benefits of outsourcing your
logistics operations. With shared information, the partnership can smooth
product flow, reduce or eliminate unnecessary inventory, trim costs and improve
service for you and your customers. The relationship you develop will hopefully
last you well into the future.
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