Executive Briefings

Report Explores Value of Integration in Logistics Outsourcing

Why are many companies choosing to outsource a variety of logistics functions to a single provider? They recognize the positive impact that integration can have on their company's supply chain, according to a new study just released by Saddle Creek Logistics Services.

Controlling costs, accommodating business fluctuations and returning focus to core competencies are just a few of the advantages identified in Top Business Drivers for Integrated Logistics Outsourcing.

The report is based on online survey responses from manufacturers, distributors, retailers and multichannel merchants with influence over logistics functions at their companies (warehousing, contract manufacturing, packaging, fulfillment, transportation, freight forwarding, etc). It examines the broader role that 3PLs are being asked to play in today's marketplace. Research highlights include:

• The vast majority of respondents (73.6 percent) outsource to providers who offer two or more logistics services, confirming the prevalence of integrated logistics outsourcing today.

• Respondents find value in outsourcing to a provider with the ability to offer integrated logistics services. More than half (52.3 percent) rate the importance of integration as 4 or 5 on a scale of 1-5.

• Primary logistics services such as transportation (36.3 percent) and warehousing (33 percent) are seen as being the most critical to obtain from a single provider. Fewer respondents look to their logistics provider for services such as packaging, product customization, or order fulfillment.

• Top business needs driving respondents to outsource to an integrated logistics provider include: controlling costs and reducing capital expenditures (53.8 percent), accommodating business fluctuations (19.8 percent), focusing on core competency (18.7 percent) and streamlining operations (17.6 percent)."While companies are clearly finding value in using a single provider for multiple logistics services, the survey results suggest an opportunity for even deeper integration beyond traditional services like warehousing and transportation," said Rob Pericht, senior vice president of operations at Saddle Creek Logistics Services. "Utilizing an experienced third-party provider for any business activity that isn't officially supported in the manufacturing environment can help to remove unnecessary links from the supply chain. Expanding the 3PL's role to include services such as packaging, product customization, or order fulfillment can help companies to increase their speed to market, accommodate business fluctuations and control costs."

Click here for the complete report.

Source: Saddle Creek Logistics Services

Controlling costs, accommodating business fluctuations and returning focus to core competencies are just a few of the advantages identified in Top Business Drivers for Integrated Logistics Outsourcing.

The report is based on online survey responses from manufacturers, distributors, retailers and multichannel merchants with influence over logistics functions at their companies (warehousing, contract manufacturing, packaging, fulfillment, transportation, freight forwarding, etc). It examines the broader role that 3PLs are being asked to play in today's marketplace. Research highlights include:

• The vast majority of respondents (73.6 percent) outsource to providers who offer two or more logistics services, confirming the prevalence of integrated logistics outsourcing today.

• Respondents find value in outsourcing to a provider with the ability to offer integrated logistics services. More than half (52.3 percent) rate the importance of integration as 4 or 5 on a scale of 1-5.

• Primary logistics services such as transportation (36.3 percent) and warehousing (33 percent) are seen as being the most critical to obtain from a single provider. Fewer respondents look to their logistics provider for services such as packaging, product customization, or order fulfillment.

• Top business needs driving respondents to outsource to an integrated logistics provider include: controlling costs and reducing capital expenditures (53.8 percent), accommodating business fluctuations (19.8 percent), focusing on core competency (18.7 percent) and streamlining operations (17.6 percent)."While companies are clearly finding value in using a single provider for multiple logistics services, the survey results suggest an opportunity for even deeper integration beyond traditional services like warehousing and transportation," said Rob Pericht, senior vice president of operations at Saddle Creek Logistics Services. "Utilizing an experienced third-party provider for any business activity that isn't officially supported in the manufacturing environment can help to remove unnecessary links from the supply chain. Expanding the 3PL's role to include services such as packaging, product customization, or order fulfillment can help companies to increase their speed to market, accommodate business fluctuations and control costs."

Click here for the complete report.

Source: Saddle Creek Logistics Services