Multiple Logistics Provider Model

Using multiple logistics providers is to employ a variety of third party organisations, selected upon the main focus of their activities or as a result of a recommendation.

On the plus side, having multiple providers can minimise the risk to your business should one company be unable to manage your requirements, and you can scrutinise costs between them for each part of the supply chain so that you feel that you’re benefiting from cost saving along the way.

The flip side of this approach is dealing with multiple contacts, managing quote comparisons each time and can mean using a variety of 3rd party systems. Keeping track of all of this can be extremely time consuming and a headache.

Overall the most challenging and critically important aspect of this approach is maintaining control. Management of this activity can be costly in terms of time and resource, and focus could be lost on other key areas of your business. However, if you are fixed on playing each party to their perceived strengths regardless of the added workload undertaken by you, then this model could be the right fit. 

Single Logistics Provider Model

This is where you could choose to work with one logistics provider and consider them to be your ‘logistics department’. This approach would be an integrated approach to your supply chain management and would encompass all stages of the process, from point of origin, to destination warehouse, through to delivered to the end customer and all managed by one entity on your behalf. 

The benefits of working in this way are touched on above and include the following sections: 

Efficiencies

Opportunities to enhance efficiencies in relation to your logistics operation are plentiful and include: 

Cost saving

• Significant savings can be made on employment costs as there is less or no requirement for an internal logistics department or training needed for this. Consider also the long term effects of this model in terms of scaling up your business as it grows, you won’t need to invest in the way that you would with an internal logistics department.
• Working with a partner that offers a warehousing solution will also save you the expense of renting or purchasing your own storage facility and the benefits of this are considerable, as you would not be responsible for:
  • Renting or purchasing equipment like forklifts and vehicles
  • Health and safety of employees and visitors
  • Keeping your space at capacity in order to justify the cost of the facility
  • Flexing labour costs, so that you are not wasting money on labour that you don’t need
• If your partner’s warehousing facility is located centrally in the country with easy access to main road networks and airports, you will save on the cost of transport. 
• The cost of logistics services like sea, air and road freight can be positively impacted using a single provider due to them being able to make an overall viable profit from all parts of the supply chain rather than just one area. 
• Efficiencies can be gained in your business by using one system that belongs to your logistics partner as opposed to having to log in to several systems across multiple providers. This can save huge amounts of time, giving you control and absolute visibility of your supply chain, which in turn can help you make important decisions swiftly and more easily. 
• Long-term relationships can be nurtured through this model and bring huge benefits including stability, trust, shared values and efficiencies through knowing each-others processes inside and out.