According to a report from Armstrong and Armstrong, over 90% of Fortune 500 corporations outsourced shipping and warehousing needs to 3rd Party Logistics suppliers (3PLs). The previous report found that 46% of the Fortune 500 outsourced these needs. As more corporations rely on 3PLs for technology improvements that aid in process-efficiency, enhanced visibility and customer demands for real-time information, 3PLs are experiencing rapid growth. And with this rapid growth, 3PLs face a variety of challenges.
In the 22nd Annual 3rd Party Logistics Study 98% of shippers and 99% of 3PLs agreed that there was an increased need for “better responses to customers and with more complete, accurate and consistent information.”
3 Reasons to Consider Outsourcing
As a transportation firm, you wouldn’t hire a driver who didn’t have the appropriate licenses and qualifications. Logistics and Transportation firms are already familiar with the process of outsourcing – and the value it can bring to your business. Let’s look at 3 big reasons you should also consider the outsourcing of additional services.
- Improve customer service
- Improve document processing & payment cycle
- Scale up or down depending on business processing needs
Reason #1 – Improve Customer Service
“Customers don’t measure you on how hard you tried. They measure you on what you deliver.” ~Steve Jobs
With both shippers and 3PLs agreeing for the need to improve response times to customers and with more accurate and consistent information, outsourcing customer service needs is one way to solve the problem. It goes without saying that if you have the right people in place, the service will improve. When Forbes surveyed 12 startups on the challenges of rapid growth and scaling their businesses, almost every executive listed difficulties with finding the right talent. The time and effort it takes to onboard a new employee can take up to a year, according to the Society for Human Resource Management, so finding the right talent is crucial to ensuring success. Outsourcing puts this burden on the shoulders of the outsourcing partner – both in operations and expense. In the same way that you excel at getting goods and materials from point A to B safely and efficiently, Business Process Outsourcing Firms have built their business around finding the right talent and getting the right people in the right places – all to ensure the success of your business.
Reason #2 – Improve Document Processing & Payment Cycles
“The successful teams focus on how to adapt their workflow to meet process requirements, while the weak teams gripe about how difficult the process is to implement.” ~Glenn Phillips
Sometimes to improve, you need to step back and view the process as an outsider. This can be easier said than done – and one of the reasons why tapping the experience of a business process firm can be instrumental in helping your logistics business grow. It’s easy to get stuck in “the way it has always been done” but business process experts have a unique ability to look at the process from a new point of view. When document processing and payment cycles are optimized, cash flow increases and expenses decrease. An additional benefit of an optimized document process is that customers are more effectively kept informed, and this can also aid in the goal of improving customer service.
Reason #3 – Scale Up or Down Depending On Business Processing Needs
“Progress is impossible without change.” ~George Bernard Shaw
With the change in seasons often comes a change in staffing needs. As stated above, when talking about talent, finding and securing the right talent can be a long, drawn out and expensive process. The challenge becomes more significant when you are trying to recruit top talent to a position that may, or may not, be needed as the seasons change. And the process to recruit and train an employee is expensive – taking away from your bottom line and your ability to effectively manage and grow your business.
But here’s where business process outsourcing shines again. As the burden of recruiting and training new staff falls on the shoulders of the business process outsourcing firm, this is one task you can easily shift. Your full time, in-house staff can be free to continue to perform their duties without having the added stress of managing a significantly increased workload.
Steps to Success with Business Process Outsourcing
The decision to outsource is not one that you should take lightly, even in an industry that is as familiar with the concept as the transportation and logistics industry is. You need to be sure that the firm you are partnering with is the right one for you. When evaluating firms, here are a few key things to look for:
Simplicity. Every business is unique, so one size will not fit all, but the right firm will have policies in place that enable a smooth, simple process to discover your individual needs – and how to solve them.
Training. Evaluate their training processes and ensure their strategy is one that is in line with yours.
Dedicated resources. Not all firms are alike. Ensure that the partner you will be working with provides a dedicated resource to just your account. Multi-tasking is a great skill but can be dangerous when it is overused.
Reporting. Consistent, detailed reporting is essential. Evaluate the providers reporting processes and strategies and ensure that it meets with your transportation and logistics firms needs.
Ready to go? Contact us today to start improving your business processes.