This is operation management seminar topic "outsourcing transportation"....

1. Outsourcing
Transportation
LG-09
Manoj 59
Anurag 35
Manikanth 41
Dheeraj 35

2. Introduction
• Outsourcing is a practice used by different
companies to reduce costs by transferring
portions of work to outside suppliers rather than
completing it internally.
• Outsourcing is an effective cost-saving strategy
when used properly. It is sometimes more
affordable to purchase a good from companies
with than it is to produce the good internally.

3. Significance
• Better Productivity
• Better Results
• Analysis, Reports, and Business Intelligence
for Continual Improvement
• Simplifying the Chaos of Transportation with
Technology

4. Why do Companies Outsource?

5. When Should You Outsource Transportation?
• Outsourcing non-core competencies has now become
a widely accepted practice across many industries.
One company may outsource IT hosting capabilities
while another outsources customer service and yet
another fulfillment needs.
• Consider the many retailers who have outsourced
their fulfillment to third-party logistics (3PL)
providers the past few years. A retailer's strength is in
selling directly to the consumer—its focus is
marketing and sales, but without the capability to
fulfill orders, it is doomed. So retailers have turned to
3PLs to focus on the back-end operations and
fulfillment.

6. DELIVERING TO THE CUSTOMER
• While many companies outsource various
functions of their business, such as customer
service, IT, and fulfillment, they often overlook
the most important part of the process—getting
the order to the customer's home.
• The company, not the carrier, bears the ultimate
responsibility for delivering packages to
consumers, so companies are finding it
increasingly important to examine various
transportation management options.

7. • Transportation management traditionally has
had low visibility within companies and is
usually kept in-house because it is a deceptively
simple process. The package has been picked,
packed, and is sitting by the dock door—but
getting the package to the consumer is the
difficult part.
• By examining transportation management and
trying to determine how to be more effective in
the marketplace, companies are turning to
transportation management providers for
guidance.

8. Benefits
• Volume Discounts
• Information Technology
• Infrastructure
• Management Team
• Customer Success
• Financial Stability

9. ON-DEMAND TRANSPORTATION.
• On-demand services are transportation services that
are not planned for (or not known about) in advance.
The services can range from courier pick-ups to
overnight air services to black car service for
executives. In each of these cases, the services are
ordered on an as-needed basis.
• Outsourcing your transportation management needs
can save you plenty of time, money, and resources.
Do your research and don't just trust your instincts in
choosing your provider. The lifetime value of your
customer relationship depends on it.

10. Problems With Outsourcing
• Loss of Control
• Increased cash outflow
• Confidentiality and security
• Selection of supplier
• Too dependent on service provider
• Loss of staff or moral problems
• Time consuming
• Provider may not understand business environment
• Provider slow to react to changes in strategy

11. Conclusion
• Outsourcing transportation can help companies to achieve greater
value. However, they must choose the right approach and partners:
• 3PLs can bring fast, substantial savings to smaller companies with
simpler supply chains, which readily benefit from these providers
market power, economies of scale, superior technology, and
seasoned talent.
• For larger, more complex organizations, an advisory firm that
assumes responsibility for the entire transportation function can
deliver more value over the long term by implementing important
changes to a company’s transportation infrastructure, capabilities
and processes.
• Ultimately, the decision requires companies to assess their goals,
capabilities, and limitations carefully.