Beginner’s Guide to Managed Logistics
Making the case for managed solutions
Good products, great people and an efficient supply chain are all essential for creating a successful company. But as your business grows and changes, it can get difficult to control it all in-house. Partnering with a managed logistics provider is a great way to relieve some of the pressure. Use this guide to learn what managed logistics is, what industries benefit from it, why outsourcing works, and how to get the most out of a partnership.
Start with the basics
What does a managed logistics provider do?
Managed providers offer logistics services and supply chain expertise to businesses that need support. By analyzing shipping data and implementing tactics like mode optimization and vendor consolidation, managed providers are able to drive efficiencies across the supply chain. Using a managed partner allows businesses to outsource some or all of their shipping operations so they can focus on other needs — often gaining benefits like reduced costs and improved visibility.
What types of businesses typically use them?
Companies in nearly every industry can benefit from managed logistics services — especially considering that e-commerce has made it possible for any business to grow rapidly, have multiple peak seasons or become a global operation. However, businesses that have large freight volumes, a widespread customer base, multiple vendors to manage, new or changing products, or an increase in market share often look to a managed provider for help.
How do managed providers differ from freight brokers?
While freight brokers are helpful for connecting shippers with carriers and negotiating rates, managed providers offer supply chain expertise and a wide range of logistics services. This means they can look at your entire supply chain to find solutions that improve efficiency, reduce costs and better serve your customers.
Why and when to use a managed logistics provider
When you work with a managed provider, their expertise, technology and transportation network are automatically available to your business — without you having to invest in new systems, provide additional training or add resources to your team.
While there are some clear signs your business may need managed solutions, the decision ultimately depends on if you need help with these critical supply chain functions:
- Material flow
- Information exchange
- Data analysis
- Cost management
If you’re consistently missing deadlines, have no insight into how much you’re spending on freight transportation, rely on manual processes to communicate with carriers and vendors, or don’t have a way to accurately track or report on your shipments, you could likely benefit from managed solutions.
Suggested Read: 5 advantages of managed solutions
Tips for maximizing the partnership
The stronger your relationship is, the more competitive your company can be. Use these tips to get most out of a partnership.
Choose a reliable company
There are several factors to consider when choosing a logistics company to work with. Everything from their experience in your industry to how they treat their customers can impact how successful your relationship is with them. Take time to ask questions and get to know their business to make the decision easier. Once you’ve narrowed down some potential partners, use the request for proposal (RFP) process to dive into the details on their services and company initiatives.
Decide which operations to outsource
Whether you’re looking to outsource everything or only need help in specific areas, knowing what parts of your business need support will be critical. If your team is full of less-than-truckload experts who aren’t as familiar with expedite and full-truckload, it may be beneficial to give just that work to a managed provider. But if your in-house team is better utilized focusing on marketing or sales, it could be better to hand off all shipping operations. Companies you’re considering will be able to walk through the options to help you understand where you’ll get the most value.
Have a plan for growth
One of the best ways to keep your supply chain operating efficiently is to plan for future growth. Having processes in place to help you with situations like introducing new products or entering new markets will help ensure you don’t lose time or money when those events occur. When discussing plans with your logistics partner, be sure to talk through how they’ll be equipped to support you in the future.
Should you partner with a managed provider? Let’s discuss the options
No matter what logistics challenges you’re facing, ArcBest is here to help solve them. Our Managed Solutions team can perform a supply chain analysis to uncover areas of inefficiency and then present options that will help reduce costs and improve performance. We’ll get to the root of your challenges and help you find the best solution for your business. Learn more about our managed service and get in touch with our team to learn more.
Suggested Read: Are These Supply Chain Challenges Keeping You Up at Night?