All inclusive package saves costs

‘True global best practices can be offered by the major logistics players’ QUERIED ON cost saving, Graham Smit, GM warehousing & logistics at Kuehne & Nagel asked his own question back: “Insource - outsource - spend money - save moneyÉ anyone’s question!” But, he added, the global trend definitely leans towards outsourcing, with price and performance pressures being felt through stiffer competition at an alarming rate. “The idea,” said Smit, “is to leave the work to the specialists, who have the experience, expertise, resources, highly developed (and costly) IT, and logical infrastructure to meet the demands of the global economy.” He suggested that the best way is to let the 3rd party logistics service providers (LSPs) jockey for the business. “Let the LSPs take care of the supply chain responsibilities from procurement, purchasing, vendor management, inventory management, warehousing/storage, transportation, to just in time (JIT) deliveries.” In Smit’s reckoning the latest trend is material ownership with financing models that complement the logistics chain. “Clients require an all inclusive package, resulting in massive cost savings,” he said, “with reduced own headcount, office space costs, administration costs, human resource costs, pressures on LSPs to comply with strict inventory policies and performance measurables.” True global ‘best practices’ can be offered only by the major logistics players, Smit told FTW, with internal/cross sharing of valuable information, internal development of common systems, standards, procedures and IT - blending with the experience gained through the global operations. “This,” he added, “is a recipe for real cost savings and improvement in efficiencies.”