Outsourcing of warehouse services

The term "logistic outsourcing" means the acquirement of services on the management of storages, the delivery of goods and its warehousing, as well as other operations of the third parties, which are connected with this business-process.

First of all this service is necessary for all companies which try to expand: for example the growth of regional up to national level. In this way, logistic outsourcing is necessary first of all for offices, which work in the sphere of small and middle business. As a rule, the large companies have their own logistic subdivisions.

However everything is not so simple, as it seems. Logistic outsourcing can be necessary any developing companies, as well as large ones, for which it is not useful to spend time on the organization of inner logistics. It is known that while expanding the office it is more difficult to solve bureaucratic issues, and in case of the increase of the quantity of new employees- new instructions, controls and the procedure are growing literally in a geometric progressive, Outsourcing helps the companies to get rid of those problems, which distracting managers from major problems.

Secondly, logistic outsourcing can be necessary for large companies, which realize that it is possible to reach the maximum effectiveness exceptionally by decreasing the cost of goods. “Own” department of logistics influences on the increase of the costs of production, as it is necessary to permanently support it, no matter it is loaded or not. If contacting with the outsourcing company, these costs can be avoided.

It is necessary to mention that own logistic services sometimes can play an important role in the inner monopoly, the services of which cost much more than the market suggestions. Many entrepreneurs accept that when logistic services with autopark and warehouses are considered to be structural subdivisions of the company, it is practically impossible to check the real cost of its services. As a result the company has to repay.

Thirdly, the use of external logistics operator helps to facilitate the work of domestic manufacturers, whose activities are based on import-export of goods, components or final products. The complete complex of services includes the delivery of goods to and from the board, the customs clearance, the provision of warehouse territories and / if the client wants/ and the maintenance of necessary level of commodity stocks in them.

The benefits from the transaction of the companies to the logistic outsourcing:

  • The costs of expenses are decreased;
  • The secondary costs are transferred from permanent into temporal ones;
  • It becomes possible to concentrate on the basic activity of the company, without diverting resources for provision of business processes;
  • You can quickly and efficiently carry out the necessary changes in the company, reduced the duration of technological processes;
  • Many ideas appeared and it is necessary to lead a company in a state where you can start the implementation of these ideas;
  • The management of the company is increased. The organizational procedure corresponds the business, its effectiveness and temp of growth;
  • While transaction to outsourcing the company gets the competition of higher class;
  • There is an opportunity to use more interesting experience, especially complex.There is a possibility to use more interesting practice.


Logistic Outsourcing- the usage for your business

The basic concept of logistic outsourcing- is the absence of necessity of use of own resources while organizing the logistic operations, which company trust the inner partner. The processes, which are impossible to sort to the main types of activity, it is necessary to estimate in compliance with the opportunities of outsourcing.

The company on outsourcing will always be more motivated on the increase of the effectiveness of the work, than the own service of office. It will assume direct financial responsibility at the expense of the level of the quality of the implementing work and it will submit the legal guarantee.

Obstacles for transition to outsourcing services:

● The fear to lose control, the fear to trust the commercial secrets to the third party, the fear toward the changes;
● The difficulty of the available accurate count of logistic costs and their comparison with the outsourcing proposal;;
● Lack of knowledge about the principles of outsourcing in business development.

It is necessary to know that the producer or distributor, who want to succeed in the market, should receive comprehensive logistic support. This will significantly reduce costs and optimize the way of products from producer to consumer.

The warehouses are the important component of distribution process: the quality and means of warehousing directly influence on the punctuality of the delivery of goods to clients and the quality of the supporting production.

What is the cost of the service of logistic outsourcing?

Some managers on logistic of industrial and commercial companies believe that the involvement of "external" service is too expensive. They think that it is profitable to use own auto transport or to involve auto transport enterprises/ The officers of logistic companies calmly perceive such statements.

- First of all it is difficult to expect the objectiveness from managers, whose income will decrease from using the logistic outsourcing by the office.
- Secondly, there is a great difference between the suggestion of auto transport enterprises and logistic companies. If the logistics with whom the office signs a contract, delay or disrupt the supply of goods, they pay penalties. Auto transport enterprises do not submit it, especially if they work without prepayment (as happens in most cases). This is a different degree of responsibility to the customer.
- Thirdly, the logistics think that the price of services corresponds to the level of the service. For example, the services of specialists on customs issues and monitoring of the external economic cargo cannot be valued cheaply.
- Fourthly, the cost of logistic services of the companies depends on the contract: a one-time contract will be more expensive than one-year or three-year one.

For example one large company with the organized logistic service, including auto park, warehouse, and distribution centers. It served a dozens of suppliers and more than 100 retail outlets located in the European part of Russia. The director on logistics of this company offered the managers to use logistic outsourcing

It turns out that the director on logistic give a suggestion which may actually leave him without a job?

These are the realities of today, so the manager who is interested in the fact that the company develops, decides to give a new impetus to the development of the company. The logistic outsourcing gives opportunity to make the company more effective. It is necessary to follow the respective norms of the work without which the stagnating will begin, leading eventually to a dead end.

In this way today the logistic outsourcing is one of the most effective ways to quickly improve business performance for a wide range of companies.


Logistic center:
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