In- and Outsourcing

Is outsourcing your logistics worthwhile? – make the right decision!

In times of globalization with international supply chains and digitalization, logistics is increasingly becoming a success factor. The speed, quality and reliability of delivery have a decisive influence on customers’ purchasing decisions. The willingness of end customers to wait a long time for the ordered goods is drastically reduced and increases the pressure on all those involved in the value chain (producers, traders, logistics and transport service providers).

At the same time, the demands on logistics services and the quality of logistics services are growing. Value-added services, returns logistics, uniform labeling, RFID, sustainable and ecological packaging, traceability, documentation and friendly drivers are just a few of the keywords that come up time and again in this context.

In order to guarantee the increasing logistic requirements in the long term, professional and economic logistics are required. However, by no means all companies concerned have the necessary know-how (customs, air freight, GDP, pharmaceuticals and food, etc.) and the necessary capacities (personnel, equipment, storage and loading space). Although it is possible to maintain or build them, this is associated with (high) costs. In addition, not every company counts the logistics sector among its core competencies.

These challenges often confront companies with the decision to either outsource their entire logistics, individual logistics services or logistics projects or to optimize the logistics area in-house.

When is it sensible and economical to outsource or in-source logistics?

It depends on the individual case whether it makes economic and strategic sense to maintain or develop your own logistics. Concentrating on core competencies and making logistics costs variable can, but need not, be the solution.

In this strategic consideration, not only the intra-logistics but the entire supply chain must be analyzed – the advantages and disadvantages must be objectively weighed against each other.

With the many years of cross-industry experience of our IWL experts, in the fields of e-commerce, pharmaceuticals, automotive, retail and many more, we are able to offer our customers a wide range of services. we determine for you the advantages and disadvantages of an in- or outsourcing project.

5 possible drivers that speak for outsourcing your logistics:

1. effects of technological progress in logistics on IT

• No need to adapt the IT landscape to new requirements or structures > reduction of IT costs
• IT personnel requirements in logistics companies can be reduced

2. increase the number of variants without adjusting the logistics capacity

• Increase customer benefit and competitiveness through more SKUs
• Simplified handling and less administrative work

3. problems in the recruitment of workers

• Reduction of own personnel requirements
• Reduced administrative burden on staff
• Peaks can be intercepted > Increase flexibility

4. returns management

• Returns handling by outsourcing partners less effort, lower costs, use economies of scale
• Returns costs become transparent

5. inorganic growth

• Reduce complexity in mergers and thus improve concentration on the essential
• No costs for logistics integration
• Less administrative effort in the course of merging processes and tasks

5 points, how the implementation of your outsourcing project succeeds:

1. consider all stakeholder groups

In addition to obvious stakeholder groups such as shareholders, departments, employees and the works council, other groups such as the community, local residents etc. must also be taken into account. Targeted discussions with all groups and the consideration of concerns enable a better acceptance of your project. We are happy to accompany you in this process and think of the most important communication groups for you.

2. process clarity and realistic time and cost frame

Why do so many outsourcing projects fail?
Outsourcing scopes to service providers reduces the internal resource requirements. However, this requires first of all investment in clear and clearly documented processes. Only then can these be optimally handled by a third party. A realistic time and cost plan as well as good controlling is indispensable for outsourcing. We have the experience in process definition, implementation planning and controlling from many outsourcing projects.

3. include “soft facts

When choosing a service provider, it is not only the lowest price that counts. Since the service provider has a direct influence on your logistics quality and thus on your customer relationship, there must be a trusting relationship between you and your service provider. We create the basis for this by making all relevant information transparent, also during the implementation and after the finishing of the project.

4. avoid false expectations

The service provider is a specialist and makes everything better! This is probably the most common misconception. It only applies if you give the service provider the opportunity to do so and yourself remain master of the process.

What does outsourcing mean in the long term and what are you facing?
To implement your project successfully, you need to plan the time before, during and after the changeover carefully. Especially during the changeover, this may mean longer process times and a higher susceptibility to errors. We support you in minimizing the unavoidable frictional losses during the transition period.

The savings potential varies enormously from company to company, but also for different areas within a company. As a neutral partner, we will be happy to give you a reliable assessment of how useful outsourcing is in your case.

5. experienced partner with implementation experience

We have already accompanied many outsourcing projects for our customers.
Profit from our know-how!

What is the process in an outsourcing project?

In order to provide you with a secure and objective basis for decision-making, we have developed a four-phase model for outsourcing projects:

Phase 1: Preparation and as-is analysis (make-or-buy analysis)

Phase 2: Detailed planning and selection of external service providers (make-or-buy decision)

Phase 3: Implementation and commissioning

Phase 4: Continuous operation and controlling

* Our phase model is based on the VDI guideline 4494, sheets 1 to 3 and DIN ISO 3750

We actively support you in the make or buy decision. In doing so, we address both the economic aspects as well as the qualitative characteristics and their corporate strategy. The existing structures such as IT landscape, processes, interfaces etc. are also analyzed and taken into account by us.

Should the decision be Make fall, so we support you gladly with the Receipt or Structure of a high-performance logistics (Process optimization, Expansion of warehouse space, Supply Chain optimization, sustainable factory and logistic concepts, safety concepts, workplace ergonomics, Returns management, etc.).

If the decision is made in favor of Buy so, we carry out the tender for logistics services with you and implement the new logistics service provider in your structures. Our services include (depending on your wishes, services can be omitted or added)

• Process definition
• Preparation of tender documents for logistics outsourcing
• Advice on the selection of service providers
• Implementation and coordination of the tender
• Communication with the service providers and all parties involved
• Evaluation of the offers
• Support in selecting the right logistics partner for you
• Implementation of the new logistics service provider in the existing structures (interfaces, responsibilities, IT etc.)
• Development of a controlling system, definition of service level agreements (SLA)
• Optimization

Whatever the decision, we are there for you, from the decision to the successful project implementation.