Is Logistics Outsourcing Right for Your Business?

Our client required a new third-party logistics partner to manage its warehousing needs in Australia. The decision to outsource was taken in response to a lack of warehouse capacity and a noticeable increase in logistics costs.

We took a traditional outsourcing approach in solving the client’s problem, commencing with expression of interest (EOI) and requests for quotation (RFQs) from selected providers. The closed tender initially involved nine companies, reduced to five for the RFQ phase.

Logistics Bureau prepared all documentation related to the EOI and RFQ processes, and facilitated the entire selection process. Our methodology made it easy for the client’s management team to evaluate and rank the providers’ quotations. After receiving presentations from the providers, participating in facilitated discussions and site visits, the client was able to make a confident final choice of partner.

Project Results

• The transition to outsourcing was completed smoothly.
• The client secured a new 3PL partnership, the contract catering for current and future needs.
• Service levels were maintained throughout and after the transition.
• The client benefited from more effective processes, space utilisation, and use of resources.
• The project led to annual cost savings approaching 10%.

A large Australian cosmetics distributor operating out of Sydney, with a single incumbent transport partner, approached us to assist with a tendering process, believing it to be an appropriate solution for logistics cost reduction.

Our first step was to benchmark the company’s transportation costs, an exercise which revealed that actually, those costs were among the lowest in our database. As a result, we recommended that instead of tendering for alternative providers, the company should negotiate a mutually beneficial, long-term contract with its existing partner.

Logistics Bureau facilitated establishment of the contract, which commenced after a six-month period of negotiation between the company and its transportation provider.

Project Results

• With our help, the client established a contract with the following benefits:
  • Appropriate KPIs in performance indices
  • Attractive market rates for parcel transportation
  • Assurance of no rate increases over the duration of the contract
• The contract enabled forecast savings of $1 million over the three years from contract commencement, due to the avoidance of what would otherwise have been additional expenses.

An Australian iconic clothing brand, with multiple market channels, approached Logistics Bureau for assistance with its initiative to tender its transportation across all national channels.

For this project, we embarked on a collaborative tendering process, which involved the following five phases:

1. A shared-vision day, leading to the submission of expressions of interest from providers able to meet the company’s high-bar expectations.
2. Demonstrations from prospective service providers.
3. Supply chain process mapping and redesign.
4. Issue of request for tender.
5. Provider evaluation and selection.

Project Results

• The company benefitted from improved supply chain processes
• Unnecessary waste, such as double handling, was removed from the supply chain operation
• The company achieved a 24% reduction in transportation expenditure, amounting to several million dollars.