Executive Briefings

Companies Want Innovation When Outsourcing Distribution Operations, Study Finds

More than 40 percent of companies that outsource intend to conduct a bid or rebid for part of their network to a logistics service provider within the next 12 months, according to the Outsourced Distribution Report by Tompkins Supply Chain Consortium.

"Despite the uncertainty in the economy, shippers are finding their existing networks in need of additional capacity," says Tim Pyne, vice president at Tompkins International and co-author of the report. "They look to LSPs to fill this gap and want to ensure that they join up with a provider that meets their performance expectations."

This survey-based report reveals responses from 95 shippers in retail, consumer products, industrial and wholesalers on trends and metrics in the present state of outsourced distribution. These companies also identify the largest areas in which LSPs need to improve: innovation and problem solving.

"Regular communication sessions, in addition to providing operational recommendations for positive change, will go a long way toward improving the satisfaction ratings in innovation and problem solving," says Chris Ferrell, director of Tompkins Supply Chain Consortium.

For companies that already outsource, they are content with their LSP's performance in the categories of flexibility, safety, order fulfillment accuracy and turnaround. Beyond the classic motives to outsource - cost, flexibility and capital - respondents also identified improved service and access to capabilities as major reasons why they hire third-party service providers.

Other results from the report:

• More than half of companies already outsource at least part of their distribution operations.

• About 74 percent of respondents have signed a long-term contract of three years or more with an LSP.

• Innovation enabled by technology can be a competitive advantage for LSPs who are willing to invest.

For more information on outsourced distribution, download the report.

Source: Tompkins Supply Chain Consortium

"Despite the uncertainty in the economy, shippers are finding their existing networks in need of additional capacity," says Tim Pyne, vice president at Tompkins International and co-author of the report. "They look to LSPs to fill this gap and want to ensure that they join up with a provider that meets their performance expectations."

This survey-based report reveals responses from 95 shippers in retail, consumer products, industrial and wholesalers on trends and metrics in the present state of outsourced distribution. These companies also identify the largest areas in which LSPs need to improve: innovation and problem solving.

"Regular communication sessions, in addition to providing operational recommendations for positive change, will go a long way toward improving the satisfaction ratings in innovation and problem solving," says Chris Ferrell, director of Tompkins Supply Chain Consortium.

For companies that already outsource, they are content with their LSP's performance in the categories of flexibility, safety, order fulfillment accuracy and turnaround. Beyond the classic motives to outsource - cost, flexibility and capital - respondents also identified improved service and access to capabilities as major reasons why they hire third-party service providers.

Other results from the report:

• More than half of companies already outsource at least part of their distribution operations.

• About 74 percent of respondents have signed a long-term contract of three years or more with an LSP.

• Innovation enabled by technology can be a competitive advantage for LSPs who are willing to invest.

For more information on outsourced distribution, download the report.

Source: Tompkins Supply Chain Consortium