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Outsourcing Logistics Expected to Revolutionize Warehousing

By June 14, 2016 January 27th, 2020 No Comments

A shift toward logistics outsourcing could spell revolutionary change for the warehousing industry that could result in leaner, more efficient business models. That was the conclusion of logistics industry experts speaking at the recent Warehouse Educational Research Council’s (WERC) annual conference in Chicago.

“In the 20th century the common business model was a large integrated company that owned, managed and directly controlled its assets,” Andy Dishner, senior director of client solutions for TMSi Logistics, told conference participants. “But in this new century we have seen a major cultural shift toward outsourcing many key functions. It really comes down to evaluating whether logistics is your core competency.”

Damian Burke, a principal with logistics consultancy Conveying Solutions Inc., joined Dishner in urging the warehousing industry to streamline logistics. Currently, companies are forced to split their resources by handling their own logistics, an area in which they may not have sufficient expertise. Burke said many companies are turning to third-party logistics providers (3PL) to solve their logistics problems. By outsourcing logistics, companies can concentrate on their primary business and leave the logistics to experts, thus streamlining their own operations.

While recommending the use of 3PLs to handle company logistics, both Burke and Dishner reminded conference participants that they could not afford to ignore logistics management. “We realize that a lot of manufacturers realize that it could be professional suicide if the choice [of a 3PL] doesn’t work out,” Dishner said. “Relationships and measurements are key,” Burke added. “We are certainly not advocating reckless investment in systems you don’t trust.”

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