The motive force for the development of third-party logistics is to create profits for customers and themselves. Third-party logistics companies must meet customers' needs with attractive services, and the service level must meet customers' expectations. In order for customers to make profits in logistics, they should also make profits themselves. Therefore, third-party logistics companies must create profits through efficient logistics operation, informationization of logistics management, modernization of logistics facilities, specialization of logistics operation and scale of logistics volume.
(1) Operating income: Third-party logistics services can first provide customers with the benefits of "logistics operation" improvement. On the one hand, third-party logistics companies can provide logistics services or production factors that customers cannot provide themselves through third-party logistics services, which is an important reason for the emergence and development of logistics outsourcing. In the case that enterprises organize their own logistics activities, or are limited to the professional knowledge or their own technical conditions, it is difficult for enterprises to meet the needs of their own logistics activities, and it is often uneconomical for enterprises to improve or solve this problem by themselves. Another improvement of logistics operation is to improve the operation performance of enterprise internal management, increase the flexibility of operation, improve the consistency of quality and service, speed and service, and make logistics operation more efficient.
(2) Economic benefits: Third-party logistics services provide customers with economic or financial benefits, which is the basis for the existence of third-party logistics services. Generally speaking, low cost is created by low-cost factors and economies of scale, including the cost of labor factors. Through logistics outsourcing, we can change the cost from no cost to variable cost, avoid blind investment, divert funds for other purposes and reduce costs.
Stable and visible costs are also positive factors affecting logistics outsourcing. When stabilizing costs, planning and budgeting procedures are simpler. Generally speaking, it is difficult to clearly distinguish the cost of one link from the cost of other links, but through logistics outsourcing and the use of third-party logistics services, suppliers must explain the costs and expenses, and the clarity of costs will increase.
(3) Management benefits: Third-party logistics services will not only improve operations and reduce costs, but also bring management-related benefits to customers. As mentioned above, logistics outsourcing can make use of management expertise that enterprises do not have, and can also use internal management resources for other more profitable purposes, which is consistent with the core strategy of enterprises. Logistics outsourcing can make the company's human resources more focused on the company's core activities, while gaining the core business capabilities of other companies (third-party logistics companies).
In addition, the benefits of a single resource and the reduction of the number of suppliers are also potential reasons for logistics outsourcing. A single resource reduces the expenditure of public relations and reduces the pressure on the company to coordinate among several transportation, handling and warehousing service providers. Third-party logistics services can bring many management benefits to customers, such as: information management of orders, avoiding work interruption, collaborative operation and so on.
(4) Strategic benefits: Logistics outsourcing can also produce strategic significance and flexibility. Including the flexibility of geographical blockade (setting or canceling) and the flexibility of adjustment according to environmental changes. Focusing on the main business is equally important at the management level and the strategic level. * * * The income from taking risks can also be obtained through third-party logistics services.
Operational Value of Third Party Logistics
The challenge faced by third-party logistics service providers is to provide higher value than customers' own logistics operations. They should not only consider the competition of similar service providers, but also look at the internal operation of potential customers. Third-party logistics providers generally need to create operational value from three aspects: improving logistics operation efficiency, integrating with customer operation and developing customer operation.
(1) Improve operational efficiency
Improving the efficiency of logistics operation means developing every activity (such as transportation and storage) that eventually forms logistics. For example, the operational efficiency of warehousing depends on adequate facilities and skilled operation skills. Another more advanced role within the scope of operational efficiency is to coordinate continuous logistics activities. In addition to operational skills, coordination and communication skills are also needed. The ability of coordination and communication is largely related to information technology, and a person's coordination and communication is generally realized through the tool of information technology. If there are favorable cost factors and the company focuses on logistics, it is very likely to provide better services at lower cost.
(2) Customer operation integration
Another way to add value to third-party logistics services is to introduce multi-customer operations or share resources among customers. For example, a multi-customer integrated warehousing and transportation network can make use of similar combined resources, and the scale benefit of integrated operation becomes an important aspect to improve efficiency. The integrated operation of third-party logistics is very complicated, which requires more information technology and skills. This comprehensive value-added method is also suitable for uneconomical transportation and storage networks operated by a single customer. Therefore, economies of scale are increasing, and if it works well, it will bring competitive advantage and a larger customer base. Of course, some large customers with large cargo flows often invest in coordination and communication skills and their assets to integrate the company's logistics resources on their own.
(3) Horizontal or vertical integration
The previous discussion mainly focused on the efficiency improvement brought by the internal operation outsourcing of third-party logistics customers. In fact, from the perspective of third-party logistics service providers, it is also necessary to integrate resources and outsource business. For the third-party logistics service providers without assets, it is mainly to manage external resources. The skills that such companies create value for customers are powerful skills such as information technology, logistics plan management and implementation. Through vertical integration, they can purchase single logistics function operation or resources with cost and service advantages, and develop relationships with single logistics function providers, which is also a way to create value. In this way, logistics suppliers can focus on their new capabilities. In the horizontal direction, if the third-party logistics companies can unite similar but non-competitive companies, they can jointly serve customers and expand the geographical coverage of providing services to customers.
(4) Developing customer operations
Another way for third-party logistics companies to create value for customers is to gain value by developing customer companies and organizing operations. This third-party logistics service is basically close to the work done by traditional logistics consulting companies, but the difference is that the solutions proposed at this time should be developed by logistics suppliers themselves. The driving force in value-added activities lies in customers' own business processes, and value-added can be regarded as the willingness to manage and integrate the supply chain.
The Cost Value of the Third Party Logistics
In the fierce competition market, reducing costs and improving profit margins are often the first choice goals pursued by enterprises. This is also the reason why the cost value of logistics was excavated as the "third profit source" after the oil crisis in the 1970s. Logistics cost is usually considered as one of the higher costs in enterprise operation. Controlling logistics cost is equivalent to controlling total cost. The complete logistics cost of an enterprise should include the investment, warehousing, transportation and distribution of fixed assets such as logistics facilities and equipment (that is, the logistics cost in a narrow sense), as well as the management fees and labor costs required for the management and logistics activities of the municipality directly under the Central Government, and the accompanying information transmission and processing costs in a broad sense. When measuring the increase or decrease of logistics cost, we should fully consider the total logistics cost composed of all these related expenses, and not just take the simple addition of transportation cost and storage cost as an index to examine the change of logistics cost. Otherwise, after controlling the logistics cost or adopting the third-party logistics, the enterprise may come to the wrong conclusion that the logistics cost of the enterprise will not fall but rise in the final accounting.
Enterprises outsource logistics business to third-party logistics companies, and professional logistics managers and technicians make full use of specialized logistics equipment, facilities and advanced information systems to give full play to the management experience of specialized logistics operations in order to achieve the best overall effect. Enterprises can no longer keep warehouses, vehicles and other logistics facilities, and the investment in logistics information system can also be passed on to third-party logistics enterprises, thus reducing the cost of investment and logistics operation. It can also reduce the number of people directly engaged in logistics, thus reducing wages and expenses; Improve the efficiency of document processing and reduce the cost of document processing; As the inventory management control is strengthened, the inventory level and cost can be reduced; Through the extensive node network of third-party logistics enterprises, the implementation of * * * same distribution can greatly improve transportation efficiency and reduce transportation costs. These are the cost values that the third party logistics can generate. For enterprises, a complete logistics cost accounting system should be established in order to truly reflect the benefits brought by implementing logistics control or adopting third-party logistics and promote the rationalization of enterprise logistics activities.