|
Companies choose to outsource warehousing and transportation operations for a variety of reasons. Once the decision to outsource is made, partnering with logistics focused companies that have built core competencies in logistics operations management is a great technique for strengthening a company’s capabilities relatively quickly with minimal investment of capital resources. However, outsourcing these critical, customer facing activities does not mean that a company is relieved of management responsibility and oversight and it does not mean that a company can successfully outsource the functions without developing and communicating detailed knowledge and operational requirements. Clear definition of operational requirements in terms that 3PL partners can understand and use to design effective operations is critical to selecting a 3PL partner, receiving the most cost effective pricing, and managing an ongoing 3PL relationship.
Many well managed companies, even ones that have previously outsourced operations, do not take the time or expend the resources to clearly define their operational requirements in a format that can be effectively utilized by potential 3PL partners. The data that can be easily reported from financial systems and some execution systems is typically not adequate for designing effective operational processes, warehouse layouts, and transportation networks.
To immediately read the rest of this TPG whitepaper, please fill in the form at the right.
Hugh D. Kinney, Jr is expertise in Supply Chain Strategy, Outsourcing Relationships, Business and Financial Management,
Process Improvement of The Progress Group.
|
