The idea of outsourcing in the logistics industry is not new. In fact, in many ways freight forwarders and customs brokers are in themselves a form of Business Process Outsourcing (BPO).
BPO is a common method companies turn to for cutting costs, helping their operations run more efficiently, and freeing up time to focus on their core competencies.
After all, is it really the best use of an employee’s time at any company to perform labor intensive back office logistics functions – many of which can be automated with technology or at least managed more efficiently by a team set up and dedicated to the specific task?
At a high level, smart BPO develops ways to take arduous tasks and make them run better. Many functions that are manual and repetitive can be completed more efficiently when they are done at scale and with trained people. Another way to look at it is that BPO is about spending your resources on higher value activities like reducing freight rates and expenses, or finding new ways to better serve your customers.
It’s the purpose of logistics and the supply chain to worry about the tasks and goals that are core to making businesses run better. BPO helps to enable this focus, but doing it successfully takes an outsourcing partner who brings resources and deep industry experience – and most importantly a sound process.
A common way to deconstruct a BPO project is in four parts, each integral to how a final solution is implemented:
- Current State – a look at what is happening now
- Gap Analysis – finding areas that can be improved
- Design – documenting and planning for the solution
- Measure – a process for managing and determining level of success
The process of managing logistics for any large company involves a complex network of data, technology, suppliers, as well as countless other details. A big part of it is also inertia – the ever present idea that things are done a certain way because “that’s always how we’ve done it”. BPO is a great way to break through that inertia.
With so much of logistics, in particular international shipping, being data and documentation intensive there are many areas BPO can provide added value.
Here’s a list of common logistics processes that can be improved with BPO.
- Rating (pre-rating, pre-audit)
- Import Security Filings (pre-alert processing, CA-CS file creation)
- Track and Trace (issue resolution)
- Load Planning (container utilization)
- Shipping Instructions
- BOL Data
- Export Invoices, Payables, Import Invoices (exception handling)
- Import Arrival Notices
- Import Renewables (on-carriage, import deliverables)
- Long Standing, Unclaimed Cargo
- Customer Service (issue resolution, complaint handling, data entry)
Many of the tasks and functions on this list are things your logistics operations must do. Thinking of each, do you see any gaps in your process for getting the work done? Do you see where a technology, or team trained to focus on a specific task could make it easier?
One way to describe the concept of logistics is to say it is controlling complexity through efficiency. As a logistics professional, you know there’s a problem that needs fixed when your processes, technology, and data are not optimal.
If you see inefficiencies within your own operation, then the answer to the original question is yes – you can benefit from BPO.