Image by Editor B via Flickr
One of the most important decisions a company needs to make involves logistics management. For some companies the best decision is to perform the majority of functions in-house and outsource shipping to a reliable transport company. However, for some companies, it makes more sense to outsource all of the logistics functions to a 3rd party company with experience in the entire logistics operation.
As a manager you have to consider what is best for your company as well as your customers. In order to make the right decision it is necessary to conduct an analysis of your company’s business model and operations. This will allow you to gain an in depth insight into the way things operate on a typical business day.
Gaining more perspective into the daily operations of your company will allow you to see first hand the benefits of both complete 3rd party logistics management compared to hiring a transport company for 3rd party shipping functions. The one thing you need to consider is whether you wish to replace an existing warehouse and employees, an important concern in today’s job market. For new companies this is not an issue because they have lower start up costs if they do not have to worry about building a warehouse and paying warehouse employees and truck drivers.
For an established company that has always owned its own warehouse and had a staff of delivery vehicles, the transition can be a difficult one to make. However, if you plan far enough ahead you will find ways to accommodate any employees that will be displaced in your company’s transition to a fully 3rd party logistics management model or outsourcing shipping needs to a 3rd party transport company. The reality is each company must look out for its own needs and must do what is best to stay competitive and maintain a reasonable profit margin.
Making the choice to outsource logistics functions or hire a transport company to meet shipping needs should not be done without a great deal of analysis and evaluation. You also want to have the company’s budget director or chief financial officer evaluate your findings before you make a final decision. Once you reach a decision concerning the future of your company’s logistics management and shipping needs you can begin doing the research necessary to choose the right outsource company.
