Global trade operations have increased dramatically in complexity, necessitating knowledge and technical expertise beyond the capabilities of most companies. Here’s what one of the world’s leading companies did to achieve its objectives in this mission-critical function.
How do you manage logistics for hundreds of warehouses, multiple manufacturers, and numerous carriers so you can provide the best service at the lowest cost? You outsource.
A medical manufacturer had a hard time keeping track of its 500 pound demonstration machines. A Texas logistics provider helped the company manage the shipping and tracking process.
Outsourcing your warehousing, distribution and other supply chain functions is not just about reducing costs and speeding up deliveries. Some companies use this outsourcing strategy to achieve a more dramatic impact on their competitive advantages.
In support of lean manufacturing principles, GM decided to outsource to a third-party logistics supplier. The results were even beyond expectationss.
Virtual warehousing is not new, but it’s sometimes not successful. QVC.com outsourced to ensure its quality standards and a seamless experience for its customers would be the result.
This outsourcing partnership started an entirely new industry that’s now a significant source of revenue for both parties. It’s an unparalleled story of what can be achieved through innovative outsourcing partners.
Any company doing business on a global scale knows what a hassle supply chain management can be. Everything from procurement to receiving becomes a difficult task when multiple currencies, customs departments and logistics are considered. And it’s that difficulty that drove Hong Kong-based global logistics management company, United States Consolidation (USC), Ltd., to look to an outsourcing supplier to ease the pain of supply chain management (SCM).
To succeed in the United States, you have to do everything right from A – M. But to go international, you have to do everything right from A – Z. A lot of factors come into play that are not present in a domestic market, says David Cisneros, sales and marketing manager for Western Export Services, Inc.
Remedy Corporation is a US software developer and manufacturer of adaptable enterprise applications. The solutions are fast-track, in-depth, scalable, easy to modify; and they quickly became very popular. Soon the small company had more than 9,100 customers in 70 countries. Remedy also handled all of its distribution of the products, and therein lies the problem. As the company grew, to keep in pace with all the development that was coming out of engineering, I just had to keep adding bodies, recalls Robert Cassese, Manager of Worldwide Logistics for Remedy. Cassese says it was a lot of work. We were doing it on the flimflam. For example, I’d go up to the stock room and say take these things, and these things, and this thing, and put them in a box, and put a label on it, and we’ll ship them. And if we needed to send a user manual, installation guide, marketing materials, I’d have to go find a printer and some guy to do it. Smart money said others could do it better than we could.
This past year companies have shifted their focus from ecommerce to elogistics outsourcing, reports Romala Ravi, an analyst with International Data Corporation (IDC) in Framingham, Massachusetts. Ravi specializes in elogistics outsourcing. She defines elogistics as an IT-enchanced and integrated function that stretches from the front-end online store all the way to the end customer. This process includes: Order management Warehousing and fulfillment Returns management Transport and delivery Customer service issues Hype about ecommerce dominated the logistics world for the last 24 months. Ravi says corporations spent significant sums building their front end capabilities. But the real challenge surfaced when the order was placed. Delivery became a problem. Then the 1999 Christmas season arrived and volume soared. Companies couldn’t deliver because of spikes in volume, notes the analyst.
Attorney Richard Raysman talks about what a business should look out for when handing over their Logistics operations.
In a relatively short period of time the logistics outsourcing business has become a multi-billion dollar industry. On a global basis, it represents somewhere between a $30 billion and $40 billion market, according to some estimates, says George Logemann, director of outsourcing consulting, The Yankee Group. Because of the speed in which logistics outsourcing has reached this significant level many changes have occurred within the enterprise — and with these changes come just as many challenges.
Murtagh explains that a good match consists of, number one, a factory that does quality work. But the plant must also have good customer service, a competitive price, and then there are certain technical capabilities the factory has to have to support the line.
After moving soldiers during the Gulf War, retired General Gus Pagonis is now moving merchandise as senior vice president of logistics at Sears.
Drive thy business, or it will drive thee — so wrote Benjamin Franklin in 1758 in The Way to Wealth, the preface to his Poor Richard’s Almanack. Thousands of companies around the world have found this advice as true today as then and have adopted outsourcing as a strategic tool to enable them to focus on their core processes.
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