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Logistics outsourcing

We help businesses decide whether outsourcing is right for them, what should be outsourced and how the operating model should be designed.

INTRODUCTION

Should you outsource your logistics?

Logistics outsourcing is an increasingly common initiative in many industries. The requirement to outsource logistics has grown in line with globalisation and increasing time and cost constraints on logistics operations. We’re here to guide and manage you through every aspect of outsourcing.

But outsourcing is not automatically the right answer. The first decision is whether external provision can genuinely improve cost, service, capability or flexibility compared with the existing operation. That requires a clear understanding of what the business needs from its logistics operation before considering who might provide it.

We help businesses assess the case for outsourcing, define which activities should remain in-house and which could be externally provided, and develop the right operating model. This creates a clear basis for making the outsource decision before moving into provider selection or tendering.

TRUSTED BY LEADING ORGANISATIONS

LOGISTICS OUTSOURCING

It's a critical decision

Outsourcing logistics or supply chain operations is a major undertaking, and requires a full understanding of the business case, and full and detailed analysis of 3PL proposals from both a quantitative and qualitative perspective. To truly get the best solution from the 3PL market, companies need to engage providers in an open and collaborative way; they need to ensure that the logistics provider has a full and detailed understanding of how their operation works, and they need to approach the market with a clear and structured process.

Before approaching the market, businesses need to establish whether outsourcing is actually the right solution. We help clients assess the current operation, understand the case for change and define what should be outsourced, considering cost, service, operational control, capability, flexibility and future requirements.

OUR APPROACH

From outsourcing decision to implementation

It’s important to, not only to be clear on why you are considering outsourcing (or re-tendering an existing contract), but also what your expectation from the service provider will be. Surprisingly cost is often not the main driver, but rather value, flexibility and innovation are. When outsourcing logistics the objectives need to be clear and well communicated in advance, ultimately forming part of the selection criteria when considering final responses.

The traditional method of identifying providers is through a ‘Request for Information’ (RFI). RFIs have their value but they should be used with caution. As a consultancy we have undertaken many logistics tenders and are very familiar with the 3PL market. Consequently we can often negate the need for an RFI process, instead connecting directly with the providers we already know to be suitable candidates.

The number and quality of responses a tender receives is highly dependent on the quality and level of detail provided in the operational profile. Significant time and effort needs to be deployed in order to provide a profile in the tender that accurately represents the business and its future objectives. This includes product data, receipt transactions, despatch transactions, delivery points, operating constraints and seasonality.

The Invitation to Tender (ITT) needs to be comprehensive, but also concise. Our logistics consultants will ensure the document is written with care and attention and an understanding of the salient points logistics providers will need to consider in their response. An ITT written by our consultants will cover, as a minimum, the operational profile, commercial framework, modelling constraints and IT requirements, along with strategic plans and a clear objective statement.

The tendering process should comprise a series of key stages covering objective validation, operational profiling, identifying potential providers, tender creation and finally tender assessment. Responding to logistics tenders can be a time consuming and highly analytical process and consequently the tender information and process should be as clear and concise as possible.

FEATURED CASE STUDY

Outsourcing a 300k sq ft warehouse operation

Omnichannel retailer with 60 stores

PTL Co helped an omnichannel retailer assess external fulfilment options for a £220m sales business operating 60 stores, a 300,000 sq ft warehouse footprint and around 16,000 live SKUs

HERE TO HELP

Making the right outsourcing decision

Our consulting team have extensive experience of managing logistics tenders, and also of designing logistics solutions on behalf of 3PLs. Regardless of the type of logistics operations being outsourced, a clear and accountable process needs to be followed to ensure 3PL solutions offered are efficient and consistent with cost and service expectations.

That process starts with understanding whether outsourcing is right for the business, what should be outsourced and what the future operation needs to deliver. We help clients assess the case for change and define the right outsourcing model before moving into provider selection.

Logistics operations can consume a large proportion of a company’s operating costs, and are very often customer facing. Consequently there are significant risks that must be managed to ensure that the process for tendering, supplier selection and implementation is diligent and effective.

CLIENT FEEDBACK

Trusted transport tender support

“PTL Co support us with the tendering of our transport operations at each contract renewal. Their structured and commercially focused approach gives us an independent view of the market, ensures our requirements are clearly defined and enables competing solutions to be assessed consistently. Their understanding of transport operations and the logistics market brings valuable insight throughout the process and helps us make well-informed decisions with confidence.”

Business Unit Director, Multivac

INSIGHT