DO IT YOURSELF OR OUTSOURCE
New phase
Your business is growing rapidly and you run out of storage locations to store products. Perhaps you have already visited a few business premises in the area, but you are still unsure. So you still have to figure it out how big that building should be. The question is whether you will take up the logistics yourself again or whether you will outsource it.
And vice versa, is also happening. The contract with the logistics service provider is about to expire and now it is time to decide. What does that decision look like and what should you pay attention to? No simple questions. Certainly not when you consider that there are several hybrid forms in which you perform activities yourself and outsource activities and that, in addition to financial considerations, qualitative criteria are also important.
Qualitative consideration
Instead of directly starting to calculate the financial feasibility, we start with qualitative considerations. Risk, flexibility, the ability to change course fast and what you want to outsource are just as important. We start, very consciously, by putting together the criteria that are important for your organization, followed by scoring them. And by applying a jointly upfront determined weight factor, the first direction has already been determined. Examples are:
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Business strategy and core competence of scenario activities;
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Financial strategy and cost structure;
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Need for volume flexibility (seasonal influences);
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Need for scalability (growth per channel);
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Risks.
Determine direction
In 2 to 3 weeks we can determine a first direction and associated follow-up steps.
If the consideration clearly shows a preference for doing it yourself, our proposal is to make a rough cost estimate of outsourcing based on empirical figures. If it turns out that outsourcing is qualitatively interesting, we recommend putting a tender out to the market and making a financial assessment based on current market prices. In certain situations, scenarios do not differ much from each other, and further financial analysis is required.
Partner selection
Service providers tend to say that they can do everything, but most of them have their specialties. It's not just about choosing a partner that is cost-effective, it's also important that it fits the size and culture of your own company.
We have a lot of experience in connecting parties and organizing logistics operations at logistics service providers.