Reasons to Outsource Your Logistics

Good logistics workers are hard to find, and when you find them, they can be hard to retain. Staff turnover is high, especially for workers with specialist skillsets such as forklifts or reach-truck drivers. The constant search for new workers, onboarding, and training people is costing companies a lot of money that they can’t spend on further developing the skills of existing workers. Automation may come to mind, but clearly, that is not always possible either.

A logistics service provider with an extensive footprint and multiple operations has two main advantages over companies that run their own logistics operation: scale and flexibility. With multiple logistics operations in an extensive network, the logistics service provider has many logistics workers, which it can leverage across its different logistics operations. They also benefit from larger contracts with temp agencies. Because of the size, they can negotiate better rates as opposed to companies with a single operation. Another benefit of outsourcing your logistics operation from a human resource point of view is that you make labor costs variable instead of fixed costs. Potential risk can be the cultural aspect, but when you have a mature service provider, they will ensure to adopt the cultural values of its customer.

One way to bring down the costs of your logistics operation is to increase its efficiency. Continuous improvement is one of the best ways to do this. Continuous improvement is not a trick, but it requires training, skills, and experience. It looks at all the processes in your operation and optimizes these, removing waste and making them faster and more efficient.

This can mean running the same process with fewer workers, less equipment, or less floor space. A good logistics service provider employs continuous improvement specialists to drive down costs and increase efficiencies across their operations. A company with a single logistics operation can do the same, but it will not leverage the knowledge and experience gained from multiple operations.

You can take continuous improvement one step further and not only improve a single logistics operation but optimize a complete network design or look at inventory management across multiple sites. At Ahlers, we use a combination of classic continuous improvement tools such as Kaizen as well as state-of-the-art data analytics software and algorithms. We have a team of design specialists and data analytics experts daily optimizing processes, warehouse design, and footprints.