Management of your logistics outsourcing

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Managing the Outsourcing of your Logistics

Outsourcing your transport, warehousing or overall supply chain function can be a complicated, stressful and confusing experience. Determining what components of your logistics function to outsource, which logistics provider best suits your organization and how to go about the process are all key aspects that you need to get right to have any chance of a successful outsourcing experience. Conversely, the same issues and problems are often confronted by the logistics provider when considering the option to take on a logistics contract.

Lexian offers a comprehensive procurement/outsourcing service to companies of all sizes to ensure the logistics outsourcing is strategically and culturally correct for your company and, if so, then assist in managing the tendering, selection and contract process to ensure a smooth transition to the new outsourced structure. We can provide assistance to either the company intending to outsource or the potential logistics provider.

Lexan’s service is based on;

  • Independent, unbiased advice
  • Ensuring the motivation for outsourcing is strategically and culturally correct for your organization
  • Developing comprehensive and accurate tender documentation using a variety of supply chain technologies
  • Assisting in locating and recommending appropriate logistics providers
  • Ensuring the best value solution is achieved by considering all aspects of the procurement decision including cultural fit, service, cost and return on investment
  • Assistance in structuring the logistics contract for the preferred logistics supplier
  • Ongoing monitoring of the outsourcing relationship

The key stages in any outsourcing project are as follows:

1. Logistics Outsourcing Strategy

This stage involves meeting(s) with the outsourcing company or logistics provider to ensure the decision to outsource is the correct one and which of the logistics functions are to be outsourced.
Tasks

  • Why outsource ? pros and cons
  • What currently works and what doesn’t
  • What functions to outsource
  • Problem areas/constraints

2. Required Solution

Once the decision to outsource is made a key step is to design what the outsourced solution will look like. This entails determining management arrangements and structures, responsibilities of parties, establishing cost targets and KPIs and managing expectations
Tasks

  • Management arrangement
  • Cost target
  • ROI ? release of capital
  • Performance improvement
  • Extent of proposed outsource arrangement
  • Expectations

3. Baseline Assessment

Once the decision to outsource is made logistics data and KPI is gathered to firstly establish a baseline of the current operations costs and secondly be used as the base data for the tender documentation
Tasks

  • Cost baseline
  • Performance measurement

4. Selection Process

This stage involves determining a target list of preferred capable suppliers, the development and issue of tender documentation and the assessment supplier responses. Contractual documentation is also developed at this stage. Selection of a preferred supplier based on tender responses
Tasks

  • Develop tender documents
  • Contract documents
  • Assessment of responses
  • Selection of preferred supplier

5. Implementation

Following the selection of the preferred supplier the changeover process to the new operating structure requires planning and supervision. This is often the most time consuming and complex stage of the process
Tasks

  • Plan changeover process
  • Facilitate operations transfer

6. Ongoing Monitoring

Key to the success of any outsourcing project is to ensure the operations and performance are regularly measured and monitored so issues are quickly addressed and management expectations are met
Tasks

  • Performance measurement
  • Management of expectations
  • Facilitating review meeting between parties
  • Review and change