If you’re new to logistics outsourcing, it’s easy to fall into common pitfalls.
In the video below, I’ll walk you through the common mistakes businesses often make and some tips to help you avoid them.
Key Mistakes to Avoid in Logistics Outsourcing
Logistics outsourcing can significantly benefit companies, but it’s easy to make costly mistakes along the way. Based on my experience, here are three critical errors to avoid to ensure a smooth and successful outsourcing process.
Inadequate or Missing Data
The first mistake is not providing enough detailed data for your 3PL to accurately quote and design a logistics solution. Without clear information, the 3PL has to rely on assumptions, which can lead to inefficiency and higher costs. For warehousing, it’s crucial to share precise details such as product dimensions, weights, and packaging. This includes specifics like how many cartons fit on a pallet or how much space you’ll need. In addition to product information, you must provide demand data, such as order frequency, average SKUs per order, and picking requirements. Ideally, the 3PL should have 12 months of transactional data to accurately assess your needs. The more information you provide upfront, the better they can design a cost-effective solution.
Underestimating Time Requirements
A common mistake is underestimating the time it takes to complete the outsourcing process. Many companies expect it to take just a couple of months, but in reality, it’s a much longer process. Preparing RFPs, gathering data, selecting potential providers, and evaluating their responses can easily take six to eight months. For complex logistics or if you’re considering a new facility, it could take even longer. Rushing this process can lead to poor decision-making and missed opportunities. Starting the process early and allowing enough time for each step is key to finding the right provider and solution.
Selecting the Wrong Providers
The final mistake is approaching too many or the wrong providers. Casting a wide net with dozens of 3PLs can overwhelm the process and make it harder to identify the right fit. Instead, focus on four to six providers that are well-suited to your business’s needs. Conduct thorough research to ensure they have experience in your industry and can handle the complexity of your requirements. The goal is to narrow down your list to a few strong candidates, ensuring you select a provider that aligns with your goals.
By avoiding these common mistakes—providing incomplete data, underestimating time, and selecting the wrong providers—you can set your logistics outsourcing project up for success.
Related articles on this topic have appeared throughout our website, check them out:
- 6 Quick Tips for Successful Logistics Outsourcing
- Insourcing or Outsourcing Logistics: Don’t Choose the Wrong Reasons
- 10 Common Pitfalls to Avoid in Logistics Outsourcing
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated April 19, 2023, under the title “Top 3 Logistics Outsourcing Mistakes You Don’t Want to Make“.
