Every company – especially the ones manufacturing or trading commodities – is a link in several logistics chains that move and store raw materials and products. When those chains can stick together, under all circumstances, withstanding abrupt changes, added value keeps accumulating to every link. They become genuine value chains, whose role in the modern society has grown more significant than anyone might have been able to predict.
Every company must handle a wide variety of goods: raw materials, supplies, components, food and so on. Their entire business may be based on manufacturing parts for a bigger entity: receiving components to make these parts in time and delivering them to be further refined, integrated, or installed according to schedule is an outright lifeline to these companies, even though it is far from its core expertise.
Efficient, reliable logistics is required everywhere – and most companies are begging for ideas to arrange this important support function in a way that would not end up costing too much.
Perhaps they should shift their focus and start to think what they might gain.
Committed specialist ensures quality, efficiency, and operational safety in a responsible way
“Companies who outsource their entire logistics operations to dedicated specialists typically increase their operational efficiency by 10 to 30 per cent,” says Jenni Ailio from Transval, Finland’s leading specialist in outsource logistics and the biggest in-house logistics company in the Nordic countries. “In addition to people who are experts in what they do, this has to do with the ability to optimize logistic streams as well as the smart use of automated solutions.”
" A big company such as Transval is an ideal way to develop both employee skills and engagement."
As the role of automation increases in logistics, turning to a specialist is the best way to ensure that a company can reap all the benefits of modern technology. An in-house staff in an organization whose core business is somewhere quite else is seldom as regularly and intensively trained and educated as staying on top of state-of-the-art solutions requires. A company who specializes in logistics focuses on keeping both its service level as well as employee skills at the highest level.
“A big company such as Transval is an ideal way to develop both employee skills and engagement”, Jenni Ailio points out. “While our own Academy ensures continuous education, it also provides ambitious employees with numerous opportunities to career advancement. The tasks may change, but the familiar employer remains with its familiar culture and values. Individual skills naturally develop every day, taking care of a wide variety of tasks.”
Speaking of employees, while many companies hesitate to outsource their logistics due to the impression that it leads to lay-offs, Transval actually recruits these people. Working under Transval management, best practices of the industry are naturally adopted. This increases the efficiency of logistics at very short notice.
Flexible solution – one clear target
While logistics can be outsourced in a wide variety of ways and extents, it should all aim to the same goal.
Optimization of material flows.
Obvious as that may sound, this goal includes one of the most essential keys to success. Not only for the company that has outsourced the logistics operations, but for all the other companies along the value chain as well.
“Logistics typically happens in chains, where every link is dependent on the others”, Jenni Ailio explains. “If one link breaks and fails to do its part in time, others must wait, or start looking for other alternatives. This costs time and money to everyone.”
Good logistics starts with reliability. That can be complemented with solutions that further enhance productivity and operational efficiency. Every company has different logistics needs – a partner with comprehensive understanding and selection of services can put together a solution for every situation. At the end of the day, it is the people who make even the most complex logistics solutions work.
“The form and coverage of collaboration can vary a lot depending on the company’s needs”, Jenni Ailio says. “While some settle for leasing a logistics professional, others outsource entire in-house logistics of a factory or a construction site. Some abandon their own warehouses, and so on.”
Little by little, the range of outsourced front-line services can increase, based on what works best.
Improved balance sheet and customer satisfaction
One of the modern management principles and keys to building success in uncertain times is to minimize fixed costs and to assume a lean, agile way of operating.
Outsourcing logistics is an excellent way to help companies in this sense as well. It turns a substantial fixed cost into variable, lightening the balance sheet and providing the company with all new kind of flexibility to operate. Outsourced services respond very swiftly to changes in the overall business environment, freeing the company from any unnecessary overhead when it comes to logistics. This is a substantial asset when a company is gathering its strength after challenging times and starts to prepare for the next productivity leap.
“Outsourcing adds a significant amount of flexibility to resourcing and ability to react to volume changes”, Jenni Ailio emphasizes. “When product flows can be optimized and unexpected downtime minimized, the financial importance is nothing short of significant. At the same time, outsourcing is a way to provide motivated professionals opportunities to develop their capabilities for further improved customer experience – in a way that resonates throughout the value chain.”
