Above a certain threshold of activity, some companies, in order to be able to refocus on their core business, choose to outsource logistics. What are the advantages and disadvantages of outsourcing logistics? Is it necessary to outsource your logistics?
Outsourcing consists of using a service provider who will be in charge of stock management, preparation and dispatch of orders.
You can, of course, delegate other areas of your business. Find out what delegation is here.
The advantages of outsourcing are numerous. The management of its logistics by a specialist will make it more efficient. And allows the company to concentrate solely on its core business.
A reduction of risks for your employee and your company is an other advantage. And to free yourself from many constraints: maintenance or replacement of certain machines in the supply chain, management of driving hours and compliance with legal obligations. As well as compatibility management, recruitment, training, replacements in the event of staff absence, administrative management of staff.
Focus on the company’s core business. A company must focus on its development, commercial as well as product development. Via its external service provider, the company will benefit from the services of an expert. A potential reduction in costs linked to logistics. Your service provider can sometimes save up to 10% in costs thanks to its own partners and negotiated rates. It makes it possible to gain flexibility in relation to your sales (linked to the season or your growth: your service provider adapts more easily than you to your growth in activity).
The disadvantages of outsourcing
Outsourcing your logistics has a cost, so it is essential to assess your company’s needs upstream. To find out if this system is the right option for you.
In addition, it will be necessary to think about comparing the offers of the different service providers.
A less good visibility on stocks. As the stocks are managed by a service provider, there is a loss of control over the stocks. This lack of visibility requires good communication between the two parties. And above all trust, which is why it is advisable to find out about and choose a trusted service provider.
Your reputation is also at stake, it is one of the main pillars of your company. However, by going through a service provider, you lose most of the operations being in direct contact with the customer. If you have any doubts about a product and its quantity you should ask your service provider.
You have just read about the advantages and disadvantages of outsourcing. However, the decision to outsource your logistics lies with you.
You yourself are in a position to know what is best for your company. While noting that by delegating this part you can concentrate on your core business. And thus forget about the daily logistics hassles.
We would be happy to discuss this with you and even provide you with a quote. Do not hesitate to contact us or to leave a message.
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