If you have an eCommerce or retail business, you must know about the complexities of handling the logistics. Besides the surging consumer demands, you need to handle various channels to sustain yourself in the industry. Infact, it becomes so resilient to manage things (at times) that even the in-house logistics team doesn't seem enough to meet the targets!
So, what's the ideal way to deal with such situations? The answer is logistic outsourcing. Logistic outsourcing ensures that you get high-end logistics services for your business. It's that little help in logistics management that takes away your burden. Here's more about logistic outsourcing and its importance.
What Do You Mean By logistics outsourcing?
Before knowing the entire term, let's understand outsourcing first. Outsourcing is a well-known business practice where you hire a third-party professional to perform any in-house task. Thus, when we say logistic outsourcing, it means taking external help from third-party service providers to handle the logistics for your supply chain.
For example, say it's a rush season, and you are falling short of productive staff to manage outbound shipping and deliveries. That's when you can reach out to a logistic outsourcing company and hire a professional to handle the work. They will ensure that the targets are met timely, and everything's done accurately.
The best thing about logistics outsourcing is that they are self-equipped. Be it warehouse, tools, technologies, or safety; they are well-sourced with all the essentials. You can stay assured of any such investment hustle.
As per data on third-party logistic users (3PL), domestic transportation is the most frequently outsourced service, followed by warehousing, custom brokerages, international transportation, and freight forwarding.
Importance of Logistics Management
Primarily, logistic management means handling, controlling, and supervising the movement of goods. But, it also includes other aspects like transport/inventory management, order fulfillment, and material handling. Logistic management is useful to satisfy customer demands while also keeping you ahead of the competitors. Some other reasons behind its importance include:
Better Services and Customer Satisfaction
Logistic management is useful for improving delivery timings. This helps the customers to get timely deliveries and hence better services from your end. In the US, 55% of shoppers prefer same-day deliveries, and 58% of customers require less than 40 minutes of delivery. With such statistics, you can offer better deliveries and warrant customer satisfaction to the consumers.
Higher Efficiency and Supply Chain Transparency
Supply chain transparency, in simple words, means having complete knowledge of what's going on in your supply chain. Logistic management provides clarity on your business supply chain, which can further contribute to better efficiency.
All your data will be thoroughly tracked and documented. Be it data analysis or operations; everything will be clear cut visible to you. So, there will be negligible disruptions and mismanagement. Having a clear picture of your logistics could also reveal your mistakes and help you improve with time.
Brand Reliability and Higher Revenue
With customer satisfaction comes brand reliability. If your customer is happy, they will speak strongly about you to others. This will ensure a better reputation and positive customer experience while generating more business for your company. Also, nearly 70% of customers say that they would support a company that offers good customer service. So, that's a plus point. Once your business grows, revenue is likely to increase itself.
With adequate logistic management, you will have optimized inventories, lesser inbound freights, and negligible goods backflow. All these factors can ensure cost-efficiency and adequate savings. So, directly or indirectly, logistic management can help you with money management. On top of that, if you outsource logistic management services, it can contribute to more cost reduction (around 70%).
Relationship between Logistics And Supply Chain Management
Logistic management is focused on the storage and goods movement. Simply put, it ensures that the products are stored and delivered precisely to the customer. On the other hand, supply chain management is a broader term.
It involves the methods and process that ensures an effortless flow of goods to the customers. While logistic management features transportation, fleet/inventory management, material handling, supply chain management, including sourcing, manufacturing, storing of goods, etc.
Both logistics and supply chain management relate to each other through goods movement from start to end. Both these concepts require the synchronization of labor and supplies to ensure an efficient flow of products. Some key common aspects between logistics and supply chain management include:
- Both of their motives are to encourage company growth and keep them ahead of the competitors.
- They focus on common factors like customer satisfaction, information, goods, services, etc.
- Both logistics and supply chain management features a similar goods flow, starting from suppliers to customers.
What is Outsourcing in Logistics and Supply Chain Management?
Outsourcing in logistics or outsourcing in supply chain management means hiring a third-party service provider to cover the services of the respective domain. This means you will be taking external help to manage and boost the supply chain functions (including logistics). Everything from warehousing to shipping and fulfilment is covered in this type of outsourcing.
Is Outsourcing a Part of Supply Chain Management?
In supply chain management, outsourcing can reduce the overall service cost and ensure better flexibility in supply chain operations. It can ease out things for your business and help you meet customer demands in a hassle-free manner. So, if you make outsourcing a part of supply chain management, it will benefit you from top to bottom.
For example, outsourcing in supply chain management can take your workload and provide additional time to develop new business ideas. Similarly, it can offer exclusive knowledge and facilities that are necessary for business upliftment. It also offers other benefits like flexibility, adaptability, lesser financial risks, professional assistance, and so on.
How Does Outsourcing Affect the Supply Chain?
While the benefits listed above are just small highlights, outsourcing has various positive effects on the supply chain like:
- Supply chain outsourcing ensures better visibility that can help you identify the risky areas and mitigative solutions accordingly.
- Thanks to their personal tools and technologies, you can get high-quality services without spending a fortune.
- You can access these useful resources to sustain yourself in the industry for a longer time.
- With supply chain outsourcing, you wouldn't face any downfall during peak seasons or employee holidays.
How Can a Logistics Outsourcing Company Help You to Handle Your Supply Chain?
With so many benefits, you must wonder how a logistic outsourcing company can manage your supply chain. Till now, we learned some experienced professionals take up the workload and meet targets for you, but what services do they exactly cover?
- 3PL outsourcing services utilise their advanced resources to process and audit thousands of bills easily. They handle critical logistic pursuits and ensure easy operations.
- You can use their expert assistance to manage the logistics even when you are well-staffed. That's because their long-term- expertise isn't worth missing.
- These service providers can manage the safety ratings, insurance certificates, distribution in supply chain management, and carrier contracts. Besides, they can provide back-office help like carrier betting and invoicing variances which eventually results in lower liabilities.
- Their charges are low, and you only have to pay for the services you took. This cuts down the cost for a full-fledged in-house team that requires employee benefits.
- Most 3PLs service providers offer real-time tracking assistance where you can check loads. Some of them are integrated with warehouse management systems for better safety.
- These professionals handle petty expenses like insurance costs, transportation, docking costs, etc. This ensures a lesser burden on your financial management team.
- They also cut down the hassle of training costs, teaching, and directing the logistics team to understand the work. As they are experts already, all you have to do is hire, and they will handle the rest.
What to Look for When Taking logistics outsourcing Services?
Like any other outsourcing service provider, choosing a proficient team is important when hiring an logistics outsourcing company. Thus, it's recommended to do thorough research and select a professional company that offers diverse services. Here's what to look for:
- They should cover important services like supply chain operations, gap/cost analysis, distribution in supply chain management, and practicality.
- If they have a website, check for their expertise. Look for their warehouse capacities, customer support team, transportation, and more.
- Make sure that they cover crucial logistic processes like receiving, pick-up and drop, inbound inspection, etc.
- Estimate a budget and look for a company that offers services within a similar cost range.
- Navigate to the review section, and check the experience of their prior customer. Avoid a company with a large number of bad reviews or ratings lower than 3.4 stars.
logistics outsourcing is one of the most useful ways to manage your business supply chains. It guarantees effortless goods management while saving your time and money from doing the same. However, to get the best services, always choose the best outsourcing logistic company.
At Wow Customer Support, you can get the finest assistance for your business logistics and supply chain management. We cover everything from shipper coordination to email/chat support and data entry to be your ideal logistics back-operations partner.
Besides that, we can also help you with invoice processing to ensure customer satisfaction. So, if you are looking for expert assistance with logistic operations, reach us today. We are happy to help you!