Even though, by most accounts, the economy continues to move sideways, one segment of the supply chain industry continues to add value and increase its revenues. While growth has been moderate, the volume of business done by the logistics service providers has continued to increase even as other firms in the supply chain have not done as well.
As supply chain managers have been plagued by uncertain economic and industry conditions, they have learned that to offer cost effective service to their customers they must be much more flexible than they have been in the past. Shifts in modes and networks have been necessary to ensure lower costs and maximum service levels, while trying to meet the needs of customers with ever-shifting buying habits. And flexibility is exactly what a logistics provider offers.
By outsourcing major parts of supply chain activities, it is much easier to make modifications when conditions change. Making these same modifications with company owned assets is much more difficult and time consuming, particularly when the supply chain manager usually is operating with fewer resources. And as firms such as Amazon and Walmart continue to raise the customer delivery and satisfaction bar, I believe even more flexibility and creativity is going to be required.
In my opinion, 2014 will be another challenging year for many supply chain managers, and the best way to meet those challenges can be summed up in one acronym -”LSEDI” – Let someone else do it. By utilizing a qualified, knowledgeable LSP, managers will find that outsourcing will relieve much of the pressure, as well as provide new ideas. As long as the providers keep their costs in line and their innovation hats on, 2014 could be a very good year.