Value-Chain Report -- Logistics Outsourcing: An Option Worth Considering

Overview: Forward-thinking companies take a closer look at third-party logistics providers to increase shareholder value. One of the most significant trends that continue to gain the attention of forward-thinking firms is the option to outsource logistics activities. Logistics providers (3PL) noted that there is an increased interest in using 3PL services, due to a growing focus by companies on generating shareholder value. The range of effective logistics outsourcing strategies spans the continuum from traditional outsourcing of transportation services to complete outsourcing of all logistics activities. Research indicates that warehousing, outbound transportation and freight bill payment and/or auditing are the most frequently outsourced logistics activities. Other logistics activities that are gaining attention and growing in popularity include packaging and assembly operations, inbound transportation and freight consolidation. In outsourcing warehouse management activities, the business strategy is to reduce costs associated with distribution and warehousing operations. The value in outsourcing warehousing activities results from reduction of fixed assets associated with the physical warehouse(s), increased capacity for executing transactional and tactical warehouse processes and overall operating cost reduction.

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Format: HTML | Date: Mar 2002 | Pages: 1