Gone are the days of transportation being just a line item on the expense side of operations. Supply chain leaders are under pressure now more than ever to create additional value for their business, thus extending the supply chain role from being a cost center to a tool for sustainable growth. Organizations are finding more creative, unique ways to ensure their products reach the consumer without delay while uncovering opportunities to meet that goal – including fully or partially outsourcing their supply chain.
Outsourcing is when a company hands over its supply chain management to minimize its overall cost, focus on its core competencies, meet customer demands, and attain flexibility in maintaining its operations. A Deloitte study shows that 79% of businesses with highly efficient supply chains enjoy greater than average revenues compared to others within their industries.
Over the past year, companies that currently have in-house supply chain management are outsourcing all or portions of the process to better compete with supply chain snarls. A great example is Home Depot exclusively chartering their own vessels or sharing space with other charters to ensure their products were reaching the public on a consistent basis versus being held up at a port or warehouse due to a lack of equipment.
Nike was also creative in sourcing a transportation solution by developing a ‘sole train’ – a secured dedicated Los Angeles to Memphis train to expedite their products faster to consumers. This included a partnership with local drayage carriers that were committed to off-loading the train as soon as it arrived, making the product available to consumers within 24 hours.
Those decisions were critical to both Home Depot and Nike’s overall business health. If they had not made the decision to partner with outside logistical experts to pivot their supply chain, it could have significantly impacted their bottom line. As companies continue to find innovative ways to keep a healthy flow on the logistics side of the house, it’s important to understand the benefits outsourcing can provide your business.
Reasons to Consider Outsourcing
If your organization is on the fence over outsourcing all or a portion of its supply chain, here are four reasons to help guide you to a decision.
1. Time Savings – Focus on Your Core Business
By outsourcing their supply chain management, companies can zero in on positioning their company more strategically. When you lessen your focus on order management or transportation moves and increase focus on sales, product development, streamlining services, and other areas you can improve your competitive edge.
2. Efficiency – Increasing Value
Partnering with a 3PL that has the right systems in place can help manage your inventory levels and respond quickly to customer needs, improving your overall ability to meet demand. Logistics providers are continuously improving their processes to offer cost-effective solutions, eliminating waste such as time, overhead, and errors. A 3PL’s logistics operation is its core competency. They have the relationships and processes to streamline your transportation needs.
3. Flexibility in Operations and Cost
With today’s economic uncertainties, companies need the ability to flex their operations. Outsourcing supply chain operations provides the company the ability to adapt more quickly to rising or slowing demand. Additionally, outsourcing provides greater flexibility in controlling costs. If you choose a contract that matches your current demand, the scope of work can be adjusted if the demand increases or decreases, paying for only what you need.
4. Peace of Mind
Partnering with an expert in supply chain management allows you to worry about one less thing. They will take on the burden of figuring out how to move your goods, allowing you to focus on moving your business forward.
Having a healthy supply chain management is vital to a company’s success. If mismanaged, it can result in late deliveries, inventory discrepancies, missed opportunities, and potentially closing the doors to your business. In today’s market, it takes dynamic thinking and discovering new opportunities to move goods around the globe. Rely on Trailer Bridge to make that happen. Our team of logistics experts is here to deliver a personalized full-service supply chain solution for your cargo needs. Contact us today to get started.