Bringing Logistics In-House: Steps To Success

Logistics are an essential part of any business. Whether you’re a small business or a large corporation, you need to have the resources in place to move your product from point A to point B. The right logistics plan can make all the difference between success and failure for your company. When you’re looking to grow your business and expand, it’s tempting to outsource everything from accounting services to payroll. The decision to manage logistics in-house is a complicated one, and factors including the nature of your products, your distribution channels, and your existing infrastructure can play a role in making this decision.

Some businesses find that managing their own logistics operations gives them greater control over cost and processes – especially if they have complex or high value products. Bringing logistics in house has become a recent trend amongst some large well-known companies and house-hold brands in order to improve their distribution networks. But it is not limited to large well-known brands. Any business can switch to inhouse logistics and succeed.

Make a Plan

Don’t start without a solid plan and strategy. You need to plan to ensure efficiency and to save you money in the long run. Consider each part of your supply chain in your plan as logistics is included in your overall arching supply chain network. Think of the logistics as the end part of the journey. Most companies that manage their logistics operations in-house will also own their own warehouses, drivers, and fleet of vehicles. These should all come into the planning process too. Incoming orders, route planning and stock tracking with digital scanners are all essential components that you should cover. Remember time management too as poor timing and efficiency will ultimately affect the reputation of your business. Your plan should cover future planning and have contingencies in place, being prepared for things that may impact your logistics in the future is a large part of getting started.

Think About Cost

Cost will be an important factor when considering an in-house logistical department. For many businesses it often works out cheaper to outsource to third parties, not only that it’s a lot less work. With less cost and less to think about it can a difficult decision however with less cost there comes less control and in the long run this can work out more expensive. Plan out your costs in advance so you know what you can afford. Don’t try to run before you can walk. Know your limits and only do what your business can realistically support, that way you can continue to grow at steady pace. Factor in costs for your new team, insurance, fuel, maintenance, and new systems. You will most likely need to buy new equipment when bringing your logistics in-house this can incur some large upfront costs. Must-have equipment includes conveyors, dock machinery, storage bins and shelves, packing materials and lifting equipment. Try to save money where you can, one great way is looking at restored/ used equipment.  For help choosing, have a look at a company like Multy Lift who supply a range of used forklifts held to the same high standard as brand-new ones and they are fully serviced. No matter what type of business you run you will need robust equipment in all areas of your supply chain invest in a refurbished forklift to save on some of the larger upfront costs.

Hire the Right Team

Your team are an extension of you and your business. Hiring the right people to run the logistics in house is a very important step to success. Ideally consult your entire taskforce first so you can find out what they want, and they may help you identify any problems before they arise.  By involving staff from the whole supply chain in the process you will have a better idea of what currently works well and what needs improvement. Your logistics team will need an excellent manager to succeed. Be sure to pick someone who is a great people person. They will need to be an effective communicator to resolve any issues quickly. Other main skills you should look for in your manager are outstanding problem solving and a calm nature. They will be responsible for sorting things out when they go wrong, and they need to be able to keep a cool head and stay professional under pressure. It would be beneficial for your team to be good networkers, that way they will always have the support of other logistical services when your business needs assistance. This might occur at intensely busy times of the year or when things go wrong.

Conclusion

Bringing logistics and supply chain management in-house has clear advantages and disadvantages. Outsourcing may mean less work and cost initially but in the long run in-house gives you the most control. You will have access to all of your data whenever you need it, be able to provide a valuable level of customer service and excellent delivery practises.

 

Share This: