Podcast: Outsourcing logistics to improve operational efficiency and optimize success
June 11, 2024
In this episode of Great Question: A Manufacturing Podcast, learn how outsourcing logistics can be an effective business strategy.
Jagan Reddy is managing partner for Netlogistik, an integrator of Blue Yonder WMS and TMS solutions. He is a senior executive with more than 20 years of strategy, transformation and P&L management experience in enterprise software businesses. He recently wrote an article for Material Handling and Logistics (MH&L) titled “Supply Chain 101: Outsourcing Logistics.” In this episode of Great Question: A Manufacturing Podcast, Adrienne Selko, senior editor for MH&L, shares Jagan's thoughts on how outsourcing logistics allows companies to free up resources and focus on their core competencies.
Below is an excerpt from the podcast:
All companies are different and the benefits gained from outsourcing logistics depend heavily on the circumstances surrounding a business and its supply chain. That being said, handing off logistics to an external service provider will help most companies:
Access Specialized Expertise: A major advantage of outsourcing logistics is that it provides access to specialized expertise that may not be available from your internal staff. For example, if your business is inexperienced or unfamiliar with international shipping regulations or customs clearance procedures, you’ll benefit greatly from a knowledgeable third-party logistics (3PL) provider who has experience dealing with these types of issues. A provider with this level of expertise will help ensure that your business is compliant with local laws while also improving efficiency within your supply chain.
Improve Transportation Efficiency: The majority of companies lack the resources and/or expertise to manage transportation efficiently. By outsourcing your transportation, you can significantly reduce overhead costs while still ensuring access to reliable transportation services. You’ll also gain access to a variety of transportation modes that may not be cost-effective for you to procure on your own.
Lower Costs by Enhancing Operational Effectiveness: External logistics providers can often perform most supply chain functions better, faster and more cost effectively than your internal staff. These logistics experts use cutting-edge technologies, such as transportation management systems (TMS) and warehouse management systems (WMS), to optimize inventory levels and deliver the experience customers are expecting you to provide. By increasing inventory accuracy, shortening order cycle times, reducing transportation costs and enhancing warehouse space utilization, these technologies can deliver cost efficiency and operational excellence.
About the Podcast Great Question: A Manufacturing Podcast offers news and information for the people who make, store and move things and those who manage and maintain the facilities where that work gets done. Manufacturers from chemical producers to automakers to machine shops can listen for critical insights into the technologies, economic conditions and best practices that can influence how to best run facilities to reach operational excellence.
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