Logistics Outsourcing? 4 Things Your Partner Needs.

May 2, 2022

5 min read

RESOURCES // BLOG

When you approach the insource-outsource decision-making process, it is important to understand your own organization’s talent, processes, technology and culture. Hand-in-hand with that: know the capabilities a best-in-class service provider brings to the table.

When you approach the insource-outsource decision-making process, it is important to understand your own organization’s talent, processes, technology and culture. Hand-in-hand with that: Know the capabilities a best-in-class outsource logistics services provider brings to the table.

Depending on the logistics outsourcing approach your business deploys, make sure your third party logistics (3PL) provider’s skillset aligns with your organization’s needs.

In today’s environment, supply chain practices are taking central focus. Recovery will depend on an adaptive response to global trade disruption, economic turmoil and a sharp shift in buying practices and delivery needs.

A lot of companies don’t have a complete understanding of what their outsource logistics partners should be providing. Outsourced solutions supplement your internal response to these dramatic shifts. When your partner exhibits these 4 Outsourcing Must-Haves, they have what it takes to help you compete at the highest level.

Logistics Outsourcing Must-Have No. 1: Responsiveness

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Is your logistics outsourcing partner ready to lend an ear - and act -  when you need help?

If you are not with a responsive 3PL logistics partner that is able to implement change quickly within your supply chain, you are setting up yourself and your company for failure.

What does it mean to have a responsive partner? Your broker or outsource logistics provider should have a regular cadence for response. This is more than a quick, timely email follow-up when there is a problem – although that is important.

More than that, a responsive 3PL partner lends an empathetic ear to what is happening within your organization. That is fundamental to internal communications within the partner organizations, and it streamlines the ability to enact change that delivers value back to you – and your customers.

The pandemic validated the importance of having a responsive partner able to deliver value in the face of major disruption.

Logistics Outsourcing Must-Have No. 2: Visibility

Not long ago, visibility was on the wish list. Today, it is a must-have for doing business.

Global supply chains have become incredibly complex, with a myriad of partners around the world. Even if you only have a domestic North American supply chain, it is still extremely dynamic and complicated.

Whether you outsource logistics, manufacturing or human resources, your partner should be able and willing to provide you with visibility to your data. It is valuable beyond belief.

Accessing that data – as well as actionable analysis of it – requires technology. You should have access and visibility to what is happening down to the SKU-level, in terms of historical trends in the shipping market with parcel, LTL, truckload and warehousing costs.

If you are considering outsourcing parts of your business, data will help you with those decisions. If you do not have access to that data – or if you cannot get it quickly, you’re with the wrong partner.

Logistics Outsourcing Must-Have No. 3: Agility

How many supply chains were turned upside down by the pandemic? On the plus side, the experience taught supply chain managers invaluable lessons about their logistics operations.

For example, what happens if—for geopolitical reasons—we decide to discontinue doing business with China? What if a big portion of your market does not want to buy from a company that sources from China?

With strategic alignment to your business and operational agility, your logistics outsource partner can anticipate market changes and provide a response plan that mitigates emerging threats to your profitability.

Whether achieved through their own technology stack or internal alignment, your 3PL logistics partner needs to be agile enough to adjust as your business changes.

Look at the retail world. In the early stages of COVID-19, every retail store apart from the essentials was closed. That spurred panic for organizations still trying to figure out ways to sell products. It forced the traditional retail model further toward e-commerce.

Companies that had carefully thought through their supply chain were able to use their retail footprint to fulfill from stores. Ship-from-store strategies kept inventory moving without requiring moves from distribution centers scattered throughout the country.

Such planning helped Levi Strauss expand its e-commerce business 25 percent in a single quarter. About one-third of that online demand was fulfilled by stores. Such a pivot required a massive change. If you do not have the internal resources of Levi’s, you need an outsource logistics partner that can support you.

Logistics Outsourcing Must-Have No. 4: Expertise

Global networks are complex. Technology is changing rapidly. Your supply chain drives many moving parts across your business. A world-class 3PL outsource partner should provide expertise in managing each of these dynamics – in addition to its core value.

What does that mean? You need a partner that is delivering expertise around technology, process, innovation and their experiences in other industries.

A logistics outsource that manages hundreds of supply chains across diverse verticals, service models and geographies can apply strategies that deliver optimal logistics performance across a broad variety of operational environments.

That broad experience means when there’s a new technology, innovation, or process that might improve manufacturing (for example), supply chain leaders are looking for ways to apply best practices in retail or distribution arenas also.

If you are in an outsourcing model focused simply on tactical execution, expertise has limited value. However, if you are looking for a truly strategic, orchestrated relationship with a logistics outsource partner, their expertise keeps your company moving forward in a disruption-filled marketplace.

What Sets Your Logistics Outsourcing Partner Apart?

If you have a responsive 3PL partner that is agile, flexible and able to deliver visibility and a deep bench of experience – hold on to it. These are prerequisite traits for a successful service relationship.

It also helps to know some of the traits that set a logistics provider apart. Three capabilities really elevate the performance of your entire supply chain. We detail these qualities during “The Logistics Dilemma: Insource vs Outsource.”

Watch the webinar today. Hear real world scenarios where our clients have realized elevated value from:

  • Trust
  • Transparency
  • Strategic alignment

Your organization works every day to fulfill strategies focused on meeting the needs of your customers – and deliver additional value along the way. If your partner does not have alignment to and understand your strategy, how can you expect them to align and create more value for you?

Check out the webinar and learn more about what sets a Supply Chain Master apart.

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BLOG

The COVID pandemic accelerated many trends in consumer behavior. It exposed risks both on the supply and demand sides of the supply chain. Supply chain strategy now needs to consider many of the adopted behaviors to be permanent. Companies have to be able to support multiple fulfillment channels, efficiently handle returns and insulate themselves from regional disruptions across the globe.

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