To What Degree Should You Outsource Your Logistics?

Unless you offer a solely digital-based product or service, logistics will need to be factored into your business plan.

For the most part, it’s easy to use third parties for a great number of these services. For example, you might use a third-party courier service to deliver your custom products to clients.

But that’s not the end of the story. After all, some companies may have more in-depth logistical needs, perhaps running trucks on the road seven days a week, or using custom vehicles to transport sensitive goods from one place to another.

In these situations, oversight demands that you curate your system in-house, such as a butchery service making certain their meat is delivered in hygienic, environmentally controlled, and perfectly chilled condition.

This begs a question – to what extent should I outsource my logistics? After all, outsourcing is often cheaper than structuring an entire department in-house.

In this post, we’ll discuss how to draw those lines, what distinctions may sway your decision in one way or another, and how technology can aid you in your decision and planning.

Without further ado, let’s get started:

Identifying Core vs Non-Core Functions

It’s important to consider which logistical cores are worth curating for your own brand. For example, the starting process of logistics, inventory, packaging, and sorting, may be better handled in your own premises.

This way you can ensure quality control and then send products to certain fulfillment centers that may deliver on your behalf.

You may also consider how your experience is best handled at the latter end of the logistics pipeline.

Perhaps kitted-up specialists need to install the final product and verify its connection to make certain the warranty is validated.

In that case, investing in the latter stage of logistics with delivery vans and even full-time technical support staff can be ideal.

As you can see, you don’t need to outsource the entire logistics route, just elements that can be fulfilled without potentially taking control of your stature as a company.

Route Planning and Optimization

It’s easy to think that if you don’t hand off vast areas of your logistics to other companies, you haven’t outsourced correctly.

But outsourcing isn’t necessarily about offering the entire structure and processes of your firm to another company or professional. It can also be about using tools.

For example, with garbage truck route optimization, a trash collecting firm can more easily optimize their pathways, and save fuel and rider time, while servicing all houses on a route more efficiently.

This software can help your fleet managers more readily plan the pathways to take each day, adjust to difficult influences, and move forward with more confidence.

Balancing Client Needs and Delivery Times

Logistics run on basic tenets, that of making sure a product arrives in great condition, as quickly as possible, and with a reasonable cost.

As such, you could perhaps outsource the entire affair to an outside source, but if you wanted to save money in the long term, you might implement some in-house measures of offering that to your local community.

So for example, perhaps for some delivery options you could outsource parts of your logistics service, for example, 24-hour delivery may be perfectly compatible with an outsourced carrier thanks to how quickly the customer needs it, and how much more they’re willing to spend for the privilege.

However, a five-day delivery time within a certain area may be free, and you’re more than happy to handle that in-house.

As you can see, a scaled implementation can also work for outsourcing. Its need can arrive and be planned from a spectrum of systemized consideration, not necessarily an all-or-nothing approach to focus on no matter what.

Investigating Experienced Providers

It’s also worthwhile to consider how other similar companies are using their logistics measures to plan their own business approach.

That’s not to say you need to copy what they do, only to see where outsourcing is coming in.

For example, it may be that they send their final bottled packages to a specific labeling company to ensure pristine labels are printed on every single product, and then this is shipped to a further carrier.

Perhaps they use fulfillment and e-commerce centers or even companies like Amazon as their main platform, using those world-spanning facilities to deliver to more countries than you might be able to at the moment.

With such an approach, you can take a clear-headed view of how other plans have been made, and what you could take inspiration from. That may inspire you to try a new route should your previous one remain in need of work.

Considering Data Security

It’s also worth considering exactly how your logistics might work in terms of data and IP security.

For example, you may have certain products that use specific and secret measures to develop a very unique and competitive product.

In some respects, taking a full-view of your own approach to logistics may be necessary to prevent other companies finding your products in the midst of their manufacturing process, heading from plant to plant.

In many cases, leaks, corporate espionage, and thefts may target less-secure logistical routes in order to get a competitive edge.

That might sound like a plot to a movie, but you’d be surprised how many companies have to factor-in security into their logistical approach to avoid these kinds of outcomes. As such, it’s wise to consider your plans ahead of time.

Scaleability of Outsourcing

We’ve mentioned how scaling your logistics for the needs of your customers is important, but it’s important to remember that the scaleability of your outsourcing is essential to consider, too.

For example, will these services help expand their services alongside your business as you grow?

For example, can you send variable levels of volume every week, and will you be charged per volume or will the subscription continue no matter how much you use the service?

That could save you money in either direction. In the long run, an approach to careful outsourcing will help you ensure a better outcome.

With this advice, you’re sure to curate the best logistical plan going forward.