Ryder System

By Purchasing Staff -- Purchasing, 10/2/2007 8:32:00 AM

SIGNS THAT YOU SHOULD OUTSOURCE LOGISTICS

1. Your company’s logistics capabilities need to grow at an accelerated pace to support customer, market or product expansions.
2. Dramatic shifts in where your company sources raw materials or finished goods had made current distribution network inefficient or uncompetitive (global sourcing; global selling).
3. Competitors are gaining market share or stealing customers by being able to promise quicker or more flexible delivery commitments.
4. Logistics related performance metrics (e.g., inventory turns, stock outs, on-time delivery, etc) continue to be a challenge to improve, particularly vs. competitors (old technology systems).
5. No cross-pollination among functions in logistics.

SIGNS THAT YOU SHOULD NOT OUTSOURCE LOGISTICS

1. Cannot get C-level commitment.
2. Your company has a poor or declining credit situation. Service providers are pushing to get out of the contract, causing customer disruptions and negative impact to your business.
3. Your company only wants to reduce costs quickly without committing to changing its business processes (automation, innovation, and speed). Cost reductions are only a one-time hit and are typically not enough to stay competitive.
4. Company believes that we have all the knowledge and tools we need in our supply chain business unit and it is viewed as a great place to work within your firm—a rocket trajectory to the top.
5. Your company’s unique needs are not available in the market.

 Source: Jim Moore, Vice President, Automotive, Aerospace and Industrial Industries