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3 Common Mistakes in Logistics Outsourcing

Logistics outsourcing can be difficult. However, with Meraki Consulting you can alleviate most of your logistics bottlenecks. Being aware of the potential pitfalls is a first step in avoiding them, so we look at common mistakes in logistics outsourcing.

Excpecting Too Much

Outsourcing is not a panacea to all your supply chain problems. Rarely will you get 100% efficiency in terms of projected savings. However, a good improvement in efficiency and cost saving is still a good reason to outsource logistics. If your only aim is to save costs, outsourcing logistics may not be the solution. However, in cases where your internal supply chain operations are grossly inefficient, outsourcing can result in enhanced efficiencies. It might cost you a little more, but the resulting efficiencies are likely to reflect in better profits.

Making Assumptions

When transitioning from in-house logistics to outsourcing, make sure everything is clearly articulated. Document the services you expect your outsourcing partner to provide. Don’t assume anything or rely on a gentleman’s agreement. Instead, enter into a contractual obligation with the supplier and document what their responsibilities are.

Outsourcing Too Much, Too Quickly

Avoid offloading all your supply chain processes to your new logistics partner. Begin by outsourcing carefully selected processes and only offload more as the partnership begins to work.

Surrendering Responsibility

Outsourcing logistics processes do not mean you are no longer responsible. Although it’s a bad idea to micromanage your partner, measuring results and constant monitoring of their progress is key to a successful logistics relationship.

Treating the Process like a One-off Purchase

Entering into a partnership with a logistics company is a long-term engagement, not a one-off purchase. You are in essence entering into a long-term partnership. Although your aim should be to hire the best logistics outsourcing company at an affordable cost, the main emphasis should be on who can provide the best services at the most competitive rate, not the cheapest.

Neglecting Communication

Effectively communicating with your provider is a prerequisite for an effective partnership. Let them know what your long- and short-term goals are. Provide them with key business data to help them align their services with your most important goals.

Mistakes in outsourcing logistics have landed many companies into an operational ditch. Like any relationship, a logistics partnership should be nurtured to produce the desired results, that is; enhanced and cost-effective logistics efficiency.

With logistics outsourcing, you can reduce your operational costs. Contact Meraki Consulting at +27 010 595 4934 or at info@merakiconsultingza.co.za.

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