Outsourcing logistics services: Increasing competitiveness for businesses
Any business leader will recognize the importance of logistics. However, for a business, or production, it is more costly to carry out the logistics chain itself than to hire logistics companies to do these tasks. Outsourcing logistics is currently a trend, not only in the world, but in Vietnam, many businesses are also interested.
Logistics helps businesses design products or services that are of superior value to the target audience, strongly support the process of developing products or services of the business smoothly through proper implementation of product strategy. export. Since then, businesses will be able to control flow and store goods and services comprehensively developed through logistics management. Regardless of the business or industry, logistics can help reduce costs and time, this is the only network for businesses to handle production, delivery, warehousing and distribution of products.
Enterprises need to outsource instead of doing it themselves
As businesses grow and expand their business they become more dependent on efficient supply chains that need to organize logistics more sophisticatedly. However, if logistics is not goods, support multi-channel sales or logistics, import and export. Therefore, businesses should outsource instead of implementing logistics stages themselves. For many reasons:
There is more time to focus on core business activities: Instead of trying to conduct logistics services yourself, hire a company with expertise and in-depth experience to carry out activities. logistics easily. This will help businesses free up resources and allow them to focus on other important activities.
Enhance customer satisfaction: Most 3PLs providers only specialize in logistics services. They know the best websites and can offer the most creative ideas and strategies to reduce costs for customers, as well as bring a better experience to their customers.
Invoice management: 3PLs providers help businesses manage all associated shipping contracts, they have office workers ready to work with billing methods, home control processes service providers, they will work with the business customer service provider, ...
Small costs such as insurance costs, assembly costs, shipping or fixed warehouse costs are handled and cared for by logistics service providers: Enterprises do not have to deal with it.
In terms of economic efficiency: If you do the logistics yourself, businesses will have to spend a lot on trying to expand the staff. If outsourced, 3PLs service providers can help you reduce the cost of personnel salaries.
Effective real-time monitoring: Most 3PLs have professional technology and enable real-time monitoring and data management capabilities. Some of the more popular service providers even offer integration with WMS and ERP. By being able to track shipments easily, 3PLs will often be more creative in the field of logistics technology, providing advanced technology to help businesses serve customers better. The types of technologies used by 3PLs are becoming a favorable and different element for their customers.
Thus, outsourcing logistics providers to 3PLs, businesses are less anxious and spend more time focusing on other core areas.
Outsourcing logistics - inevitable trend
According to research by Armstrong & Associates (a leading company in the 3PL market research and consultancy), global 3PLs revenue reached 802 billion dollars in 2016 and is on track to exceed 962 billion dollars in the year. 2020. A potential market shows that outsourcing logistics is now an inevitable trend.
The third-party logistics research 2017 from Capgemini Consulting shows that the relationship between shippers and 3PLs suppliers promotes efficiency and value in the supply chain. 91% of 3PL users and 97% of 3PL service providers have reported that their relationship is successful and their work brings positive results. 75% of logistics service users (shippers) and 93% of 3PL providers said the use of 3PL services has contributed to reducing overall logistics costs; 86% of shippers and 98% of 3PL suppliers said that using 3PL has contributed to improving customer service; 73% of shippers and 90% of 3PL suppliers provide 3PLs with new and innovative ways to improve logistics performance. It can be said that the 3PL provider is now an expert in supply chain management, being an efficient producer for the business.
In Vietnam, logistics outsourcing rates currently account for only 35% - 40%. The main reason is due to lack of coordination and cooperation between logistics service providers with manufacturers and importers and exporters. Decision No. 200 / QD-TTg on improving competitiveness of Vietnam's logistics industry has set the task until 2025, the rate of outsourcing logistics services will reach 50% - 60%. Resolution 19-2018 / NQ-CP The Government also determined the need to promote the development of outsourced logistics. At the same time, Vietnam Association of Logistics Services Enterprises (VLA) also brought the promotion of outsourcing logistics services to be one of the key tasks to be implemented in 2018.
To achieve the desired outsourcing rates, according to experts, logistics enterprises need to standardize logistics services by providing high quality logistics services, thereby gradually building trust with businesses. import and export. Logistics businesses also need to boldly invest in information technology to provide better services. There is a need for coordination between logistics enterprises to use each other's available and surplus capacities, creating technology platforms for transport, logistics services in general to create competitive costs.
Source: Logistics Review