Is it best to outsource the logistics process or do it yourself? This blog explains the advantages and disadvantages!
A company’s logistics process is one of the factors for business success. It is an important but time-consuming aspect of business operations. Whether to outsource these processes or do it yourself is therefore a valid question. Outsourcing the logistics process can be stressful, but it is often a smart move. Outsourced logistics can offer many advantages from a financial perspective and also in terms of quality and efficiency. However, there are also disadvantages to outsourcing the logistics process. We have listed the advantages and disadvantages of outsourcing the logistics process.
Why outsource your logistics process? Advantage 1: peace of mind
Finding a logistics partnership or outsourcing your logistics department or warehouse can give you real peace of mind. It allows you to fully focus on your own core business activities while an external party takes care of the logistics process. It also means you don’t have to think about your staff or the best layout for your warehouse. Quiet times or peak days in the webshop? Extra workforce required, or lack of space? That’s not your problem! The first benefit of outsourcing is therefore peace and quiet.
Want to outsource your webshop warehouse? Advantage 2: fewer risks
Physical space can be a problem, especially for e-commerce businesses and online stores. Many start-ups do not have much warehouse space of their own. ‘Brick-and-mortar’ companies can also benefit from an outsourced warehouse as it means they don’t have to invest in in-house space, staff or ‘spare space’. If the webshop or store is growing and there is a sudden rush for your products, an external party can handle peaks flexibly for you. This means you do not need to hunt for alternative premises or additional staff straight away. You shift the financial and operational risk to the external party.
External warehousing? Advantage 3: financially appealing
There are clear financial advantages to outsourcing your logistics process. It means you don’t have to invest in a physical warehouse or warehouse staff, and you don’t have to deal with excess capacity. You only pay for what you need and have no long-term obligations.
Logistics collaboration? Advantage 4: higher quality
Another advantage of outsourced logistics is that you get to do what you are good at, while your logistics collaboration partner does the same. Logistics is the core business of an external warehouse, which knows exactly what does and does not work. You can count on knowledge, experience and a streamlined operation.
Disadvantages of outsourcing the logistics process 1: less control
If you outsource your warehousing, you no longer walk around the warehouse yourself each day. Your overall view of operations is less immediate and you have to place your trust in the service provider. If something happens to your service provider, such as a fire or burglary, that is not your responsibility but you will be affected by the incident.
Disadvantage of an outsourced warehouse 2: more difficult to retrieve product information
In an external warehouse, you cannot simply take a look at a particular product on a particular shelf. However, this disadvantage is easily remedied with good warehouse software and good stock management.
Disadvantage of external logistics 3: implementation and transition period
When outsourcing your logistics process, there is a one-off implementation process. Converting and moving things, setting up processes, connecting systems and instructing people… all that takes time and effort.
Our advice
Why should you outsource your logistics process?
Outsourcing the logistics process is a good choice if you:
- Want peace of mind that everything is running smoothly and you don’t want to have to worry about warehousing;
- don’t have enough physical space or staff to optimally run your warehouse;
- don’t want the worry of coping with seasonal peaks.
Why wouldn’t you outsource your logistics process?
- If your logistics process is very personal, for example if you wrap each parcel yourself with handwritten notes, external logistics is not a practical option.
- If personal control and physical presence are very important to you, it would be better to keep all processes in-house.
Want to know more about outsourcing your logistics process?
Still can’t work out which option is best for you? Contact PON without obligation!