08/05/2024
6 steps to successfully outsource your logistics
Logistical outsourcing involves having a third party manage your e-commerce logistics and fulfilment, from stock through to delivery, including order preparation, packaging and managing customer returns. Why use it? It offers numerous benefits for ecommerce businesses of all sizes.
“Logistics is the hidden part of the iceberg where your customersʼ purchasing experience is concerned”, explains William David, logistical engineer at GEODIS. “Good logistics means a successful customer experience”.
Are you in charge of logistics or managing a company which is thinking of outsourcing its logistics? Here are 6 steps to help you better identify your needs and to choose the best adapted solutions.
Step 1: Be aware of your logistical requirements
Being better aware of your logistical requirements means being able to better anticipate processes and to make better choices where solutions are concerned. This enables you to successfully optimise your logistical costs and processes, to ensure fully compliant orders and to improve customer satisfaction.
To determine these requirements, you should start by considering the issue of storage. What quantity of products do you need your logistics operator to store for you? This quantity depends on the sales per reference, the stock lead-time and the security stock you want for each reference.
This will influence the choices to be made by the logistics service provider concerning the picking locations or the type of storage best suited to your needs.
You should also give thought to your shipping and delivery requirements and your clientele. Should orders be personalised or do you require other value-added services such as co-packing? How would you like returns to be managed?
Step 2: Choosing the right partner to outsource your logistics
Opt for a logistics partner who can understand your needs and provide suitably adapted and tailored solutions.
“Your logistics partner is the last stakeholder involved in your customer experience”, adds Pierre-Alexandre Rodier, Logistics Project Manager at GEODIS. It conveys your image. Making the right choice of logistics partner ensures that the real-world customer experience matches the online customer experience!”.
Naturally, this service provider must have warehouses in which to store your products, taking account of the product type and stock coverage requirements. They must also be strategically located, for example near the main road networks or the carriersʼ hubs.
Itʼs also at this stage that you should consider the commitments provided by your logistical services provider, concerning environmental issues for example.
Finally, you should check the connectivity aspects of the different solutions. Youʼll certainly be looking for fast and simple Plug & Play type solutions, with a centralised logistics management solution to access order status management features for tracking and returns. A partner able to connect simply and quickly can be a real benefit!
Step 3: Ensure the connectivity of your logistics solutions
Plug & Play type solutions today make it possible to connect your CMS to a logistical service providerʼs platforms easily, using their technology. This saves time and improves reliability. Everything is automated and the customer experience is enhanced by the real-time information received.
Itʼs therefore important to ensure the compatibility of the IT interfaces used (CMS, WMS, OMS and Marketplaces).
Finally, youʼll need to connect your e-Commerce returns solution. When you connect the Plug & Play solution, itʼs incorporated directly within your e-Commerce website!
Step 4: Send your merchandise to the warehouse
The next step involves sending your merchandise to the chosen e-commerce logistical service providerʼs warehouse. Itʼs a key step in getting your business up and running. It makes it possible to establish your stock, which means that you can then start receiving, preparing and shipping orders.
For this part, you need to choose a carrier. Cost is a factor here, but also transit times or, if you have merchandise with special transportation requirements, the services specific to each carrier.
Itʼs vitally important to ensure that your products are well packed and packaged. They need to be wrapped, in boxes and ideally on pallets to facilitate handling.
You also need to label them with the product references and the box and pallet references to be able to locate them easily.
Step 5: Choose your shipment and delivery methods
Carefully selecting your shipment methods and dealing with the right service providers can improve the customer experience, thereby building customer loyalty. As the manager or head of logistics for an e-Commerce business, this aspect can help you control and reduce your costs.
The packaging must be chosen according to the size and characteristics of the products involved (ie. if they are fragile or valuable) but also to avoid invoicing of empty space during transportation.
Where transport is concerned, you can deal directly with a carrier or subcontract this step to a logistics service provider. The logistics service provider will then manage the administrative matters, invoicing, delivery issues and insurance, etc.
The choice of the carrier will be dependent on several criteria such as pricing, the environmental footprint, the location of your warehouses and their proximity to the carriersʼ hubs, or the location of your customers. Some carriers are more (or less) effective depending on the country concerned.
Step 6: Track and manage your business activities in real time
Monitoring your business activities in real time means that you can stay in control of stock management, even when using an external logistical services provider. This allows you to adjust your activity in the event of a downturn in business or to prepare for the peak seasons. By avoiding stock-out incidents, youʼll improve the overall customer experience.
This can also be a major advantage in the event of a product recall (due to defective products or non-compliant food products). Itʼs also useful when managing perishable goods, to be able to track the products and their expiry dates, and possibly dispose of them quickly as the said date approaches.
Conclusion
Monitoring your business activity can also help you optimise your e-merchandising to take account of improved sales. It gives you the opportunity to increase them and to make changes to your product ranges to help your company grow. Conversely, monitoring and analysing.
Youʼre now familiar with the 6 key steps involved in successfully outsourcing your logistics. Keep in mind that making the right choices where storage, packaging, and order monitoring systems are concerned will enable you to improve your in-house performance but also customer satisfaction. This is a key aspect where the growth of your e-commerce business is concerned.