In the past, we have often discussed the question ‘Do I outsource my logistics or not?‘. This may seem like a short yes or no question, but there are many other factors you should take into account before making this decision. More precise, you should answer 4 questions. This week we will look at the following 2 questions.
1. How strong is my digitization?
It remains our chief concern, because we are convinced that successful outsourcing depends on the extent to which you digitize your company. Even regardless of whether or not you want to outsource, the extent to which you digitize will determine your success in the future.
After all, we are evolving more and more towards an omni-channel market in which you approach different target groups and markets at the same time. Of course, you want each part to reinforce each other so that, for example, your marketing is one complete story and you can follow your customer through the different channels. This way you can communicate better with your customer in function of his real needs.
Even in outsourcing, the customer is king
If you want to outsource your logistics, this is especially important because it gives your e-fulfilment partner the opportunity to serve each sales channel in a different way. The partner can organize your order flows according to the needs of each sales channel. Sending an order to a final consumer requires a totally different approach than sending an order to a local retailer, a marketplace or a wholesaler abroad. Think about packaging, dealing with due dates and the way of delivery.
An additional advantage of digitization is that you and your partner are more easily able to adapt processes as your market evolves. Everyone notices faster changes in the needs of a customer, regardless of whether this is B2C or B2B. The extent to which you can keep up with these changes also determines your effective long-term added value.
2. How do I distinguish myself from the rest?
We are always looking for the Holy Grail, which makes you different from your competitor. In the past, this was mainly determined by your product, your price or a mix of both. Thanks to digitization, many dimensions have been added. It gives us the opportunity to better understand our customer and to respond more quickly to his needs.
As a result, the way in which you do R&D or communicate with your customer, can also offer a strategic advantage. In short, you have to determine the right mix of things that are crucial for your company to be able to diversify. It is this mix that you need to keep to yourself as much as possible in your company.
Outsourcing must strengthen the inhouse services
The other outsourced services, however, must fit in well with your unique story, so that they strengthen your distinguishing capacity. There is little added value in saying, for example, that your customers need to build up little stock, if your logistics service provider or your manufacturer does not have a fast and flexible model that ensures that your customer always has available stock.
The better you map out where your unique added value lies and the stronger you can translate it into digital processes, the more likely it is that this unique story will take place throughout all the processes of your company.
If you would like to know more about how both questions have an impact on an external logistics service provider, please do not hesitate to contact us. Next week we will explain the last 2 parts!