Logistics outsourcing is the acquisition of logistics services from third parties. The essence of the service is to reduce the cost of the implementation of the supply chain by engaging in the business processes of a qualified professional - a logistics operator.
Thailand Logistics Outsourcing
In the Thailand Logistics Outsourcing emerged at the turn of the late 80's, early 90's. In that remote period, logistic services provided by third parties, were quite primitive. For the most part, these were transportation or storage services, and of course the services of customs brokers. Today, logistics outsourcing in Thailand is very different from its initial state during the initial accumulation of capital. Classic modern logistics operator has rented or own a warehouse of class "A", "B"; qualified management personnel with higher and technical education, specialty logistics and transport, effectively manages client business processes; own container park or a rolling stock. As a result of the crisis 2008-2009 as many small and medium-sized and some large, inefficient control of their assets, Logistics Companies ceased operations. They went bankrupt or went bankrupt. Survived only by those who have managed to optimize the height of the crisis in their state to get away from loss-making operations, convert the empty warehouse and office space for sublease or other profitable purposes.
Today, logistics outsourcing market in Thailand is experiencing another wave of development. The first wave of logistics outsourcing came in the early '90s, when the market began to form the first who came to Thailand, multinational corporations. They entered the primary standards for logistics operators that period. The next wave of development of the logistics outsourcing came just at the post-crisis 2000s. Then, as after the current crisis of 2008-2009, the surviving companies have begun to actively developed in parallel growing market, encourage investment, the growth of consumer demand, and consequently, an increase in orders in logistics.
The higher the level of consumption in the country, the more necessary to specialize in foreign trade companies, distributors, manufacturers, and the same commercial networks in their immediate work. The more there is the need to have for the organization of qualified supply chain logistics operators and transfer of a part of operations in logistics outsourcing.
Many companies do not do justice to the side of logistics services for different reasons. They create their own logistics departments. Most often it occurs in the continuous production, in specialized business processes, where it is important for a business owner to keep their unique logistics solutions. Although in the present conditions it is still more anachronistic than an end in itself - the protection of certain information of their owned business processes from competitors.
If in the logistics department of the client company employs professionals who have all the necessary attributes of a professional logistics operator, who know by heart all the business processes of the company. If a company has at its disposal a modern warehouse "A" class, modern equipment and processing technology of commodity flows. If there is forwarding and shipping department brokerage department of customs clearance of imported goods, in this case, the logistics department will not differ from the classic logistics operator, with one exception – they works exclusively on the trade flows of the parent company, so more vulnerable to seasonal ups and downs of logistics services themselves all planned and balanced. Clients of the logistics operator specially selected based on asynchrony, thus aligning the average annual burden on staff, special services and warehouse.
Sometimes customers are trying to work with multiple logistic operators. The first reason is when the customer selects two logistics operators, primarily due to no confidence in them. Fearing that not every single logistics operator handles the full scope of his orders, the second reason is, if the customer does not want to show your entire business process logistics operator. So it happens that the client himself intermediary in the supply chain between the end customer and logistics services logistics operator. Therefore, the client is insured. The third reason, work through two or more operators sometimes makes it possible to put pressure on each of them, achieving lower rates, tariffs, the fourth reason, delusion or ignorance of the logistics services. Usually, any major logistics company is able to perform the full range of logistics services to the customer at affordable prices with high quality logistics services.
Quite often, logistics companies use special operating technology, with a minimum of storage, that is, the operation on Cross Docking. Cross Docking is receiving, and then instant shipment of goods in the warehouse, without placing it in the area of commercial storage. Usually this scheme with the product used in the following cases. This product comes in a container to a warehouse and must immediately dissolve in small batches in various retailers or customers. Another case is Cross Docking applied to the goods having short-term preservation. It should clearly understand that the Cross Docking could not be organizing without the modern technology of accounting and control stock on hand. For these purposes, necessarily apply WMS-Inventory systems using barcode scanners. Only in the case of the application of modern technology hardware control in a high turnover of goods in cross-docking, possibly to avoid significant accounting errors, incorrect shipments, the loss of the goods, the costs of product shelf life.
Typically, cross-docking use distributors and food manufacturers as well as importers of sensitive products, such as fresh fish, fruit, citrus fruits, dairy products, baked goods. Just Cross Docking used for the continuous cycle of production enterprises. That is another story. Such a scheme for receiving, processing and product mandrel is beneficial to all players in the logistics chain, as it allows the optimum flow of goods to dispose of, at minimum cost.
In the logistics business is very often used specific terminology determining the competence of the logistics operator, which must understood. To do this, we present the following qualifier:
1PL (First Party Logistics) which is an autonomous logistics, all the operations he performs the cargo owner.
2PL (Second Party Logistics)-providing traditional transportation services and management of storage facilities.
3PL (Third Party Logistics) - extension of the standard list of non-standard services (storage, handling, cargo handling, and additional services with significant added value), the use of subcontractors.
4PL (Fourth Party Logistics) - the integration of all the companies involved in the supply chain, the system, the proposed merger of functions of all organizations involved in the distribution of products and merchandises. The task of the 4PL-provider includes planning, management and control of all logistics processes of the customer to achieve a long-term strategic goals and objectives of business expansion.
5PL (Fifth Party Logistics)-management of all components that make up a chain of delivery of goods, with the help of electronic media.
As can be seen from the classifier, 3PL, 4PL, 5PL logistics operators - it integrators of logistics processes high when the whole supply chain is controlled and operated by one highly skilled logistics provider. Typically, these types of operators are in demand in competitive markets. Their services are used by multinational companies producing high-tech products in a continuous production cycle and multinationals using the services of 4PL-operators set, in particular it: SONY, TOSHIBA, automotive corporations (FORD, DAIMLER CHRUSLER) and others.
In the logistics business, as in any other, there are certain problems, which based on the incompetence of one of the parties. A typical problem arises at the time of negotiation; the client beats his chest and says that it will provide a large flow of goods in the warehouse logistics operator. That the flow of shipments by all modes of transport will continue to grow exponentially, and the customs services have to perform to the extent that the operator declarants will not suffice. On this optimistic backdrop client, of course, asks the minimum rates for all types of services from logistics provider. However, after a month, another client and abundant promises do not come true even at 10% off! Conclusion: Do discounts according to the real results. This approach is very well stimulating both sides of the process, and the client and the artist.
The second major problem in the relationship with the client is the quality of the logistics operations, previously announced. Here, with all equal positions, more can bring the client itself is a logistics provider. However, always with a certain reservation, if a customer orders a service for you at the lowest price, its clearly understood that for little money it receives earlier agreed services are not of high quality. It is the law in logistics that quality cannot be cheap!
Tip: To determine the development strategy of your company, then you will understand the price of high-quality logistics services.
The third major problem in the relations between the customer and the logistics provider can be considerable an error in the calculations internally for seasonal volumes of logistics services. Alternatively, knowingly mislead logistics provider, not matching with it extreme jumps in the seasonal period. All seasonal races processing with the logistics provider must planned and coordinated long before such events. Otherwise, you will not collect the required number of staff to carry out such intensive, a lot of assortment of orders.
In conclusion, I would like to note that the Thailand Logistics Outsourcing has a great, but not simple future. Margin for the development of logistics outsourcing in our country is great.
At present, we at Green Asia Line became a partner DHL Global Logistics operator for the implementation of the international container projects from the USA, France and China. The company DHL has four divisions, each of which focuses on providing certain services in express delivery, transport and logistics.