Inhouse vs outsourced logistics – which is best for your business?

Ecommerce and retail businesses will often start by managing their fulfilment and logistics services inhouse. This can create a sense of brand ownership and control. However, as you begin to scale, managing these resources inhouse successfully can take up a lot of time, training, space and system capacity.

The COVID-19 pandemic has prompted every business – large or small – to do things differently. Change is the new norm, and business models and supply chains have been disrupted. At the start, businesses were reacting to the fast-changing patterns of customer demand, the need to keep employees and customers safe, supply chain disruptions, as well as the reality of the rapid-shift to online business. As the government initiates an emergence from lockdown, businesses now need to plan more strategically in order to positively manage this change in the longer term.

As a fulfilment and logistics partner to a range of well-known brands, Cygnia has been at the frontline of supply chain adaptation, playing a critical role in helping businesses to manage and mitigate the risks they’re facing.

As companies rethink their logistics strategies and operations for the future, they’re looking to expert providers to help them in navigating their way through the uncertainties.

In a recently published report – 12 ways the coronavirus will change warehousing –  in SHD Logistics magazine, Professor John Manners-Bell, chief executive of Ti, considers how third party logistics providers (3PLs) can be better placed to help businesses to manage the pandemic’s increased safety risks and to gain access to extended facilities, which will help the to better manage and distribute inventories.

Throughout the COVID-19 pandemic, the transport and logistics industry has remained in operation as its services were deemed essential and its teams deemed key workers. As a result, focus has transitioned to more essential items, and delivery service expectations have been managed and flexed to ensure safe operations.

Working to resolve supply chain issues quickly has allowed for innovation and operational change to be rapidly implemented.

Prior to the crisis, retailers were already increasing their use of 3PLs, with Global Insights predicting that the market will be worth a staggering $1.8 trillion by 2026. As more transactions take place online, supply chains are increasingly becoming a crucial element of the overall customer experience. Order fulfilment is an essential tough point with customers – it either prompts brand loyalty or encourages bad reviews. With 74% of shoppers saying they’d only purchase from a retailer again if their previous shipping experience was pleasant, there is huge value in perfectly delivering products.

When should you consider outsourcing?

As a business, it’s important to focus on ways to emerge and recover from both lockdown and the overall economic impact of the pandemic. Working with 3PLs can help to reduce the risks you face, while freeing up more time and resources. Key trigger points for the need to outsource your logistics include: a lack of time or space to invest in training or systems, restricted worker capacity and the need for help to respond to increasing customer expectations.

At Cygnia, our customers are often looking to scale when they come to us, and they need to dedicate more of their time and other inhouse resources towards their core business activities. As a result, they’re seeking a trusted partner, who will take the time to understand their detailed operations and brand experience.

A 3PL can provide businesses with access to specialist experience, new delivery possibilities and innovative technologies. In addition, they can also help to address new challenges, such as improving the sustainability of operations or opening up new markets.

What are the benefits to outsourcing?

  1. Data accessibility
    Outsourcing can provide you with greater access to, and integration of, the latest logistics technologies. This can give you the insight to operate more efficiently and take advantage of new opportunities.
  2. More time
    Time and resourcing will be freed up to focus on growth and recovery.
  3. Opportunities to scale
    Outsourcing allows businesses to scale up flexibly, with increased agility to help them navigate successfully through the uncertainty of future markets.
  4. Expertise
    3PL providers can give you the expertise you need to deliver a positive, omni-channel brand experience, enabling you to deliver for your customers consistently and seamlessly – whether they choose to remain online or revert back to the high street.
  5. Fresh ideas
    3PLs can bring fresh insights and ideas to your business, giving you the creativity to differentiate your customer experience in an increasingly competitive marketplace.
  6. Higher value, lower costs
    75% of businesses outsourcing their logistics report a reduction in costs.

 

Trust is everything

The most successful 3PL relationships are grounded on trust and transparency. When these come together, the rewards of outsourcing can be great.

For more information about the benefits of outsourcing, get in touch with a member of the team.