Outsourcing the task of operating a warehouse can add significant value to a company’s supply chain, says logistics company Value Logistics.
Value Logistics CEO Steven Gottschalk notes that, over the years, more and more businesses have turned to industry leaders to outsource their warehousing in a bid to enhance their business practices, streamline their costs and reduce their risks within their supply chain.
Across industries, outsourcing within the supply chain has become an attractive option that holds value for any company and, when used and leveraged effectively, can unlock a greater number of opportunities, he adds.
Value Logistics says there are three main reasons why companies outsource. Firstly, outsourcing warehousing operations enables companies to focus on their core competences and, when warehousing operations do not form part of a company’s core business, they outsource. This, in turn, gives companies time and energy to focus on their business, leaving noncore functions to specialists in the warehousing field.
Secondly, outsourced warehousing enables companies to benefit from shared resources. In an outsourced environment, a company is exposed to a larger network of contacts and resources, with the added benefit of not having to manage human resource challenges.
Thirdly, by outsourcing their warehousing operations, companies benefit from the specific expertise that a dedicated outsource partner can bring to their business, ultimately reducing the risk of failure and increasing effectiveness.
However, while the concept of outsourced warehousing operations is attractive, Gottschalk warns, there are some challenges facing businesses that are looking to outsource any aspect of their supply chain. Some obstacles could include a company’s current infrastructure, staffing limitations and legacy systems.
Nevertheless, Gottschalk notes that not outsourcing its warehousing operations may be to a company’s detriment, as a supply chain, like any other chain, is only as strong as its weakest link.
This link is often the warehouse. Businesses across industries struggle with multiple challenges ranging from staffing issues and overstocked warehousing, to underused resources and ageing systems. These problems manifest all along the supply chain and their knock-on effect and cost implications can be damaging.
With ageing systems, businesses often fail to remain competitive and, as a result, their supply chain is often caught up in the problems created by ageing infrastructure and technology.
“Value Logistics continues to invest significantly in technology, processes and people, enabling efficient supply chains. Not only do we also offer fully owned end-to-end supply chain solutions where we control, own and manage each part, we also offer state-of-the-art facilities backed by leading technology and professional people,” concludes Gottschalk.