OREANDA-NEWS. February 6, 2012. On January 27th, within All-Ukrainian Conference Non-FoodMaster-2012: Retailer and Producer: Optimal Joint Strategy for Increasing Sales, where the organizers gathered CEOs and top-managers of Ukraines leading nonfood (DIY) companies from retail, distribution and production, Alina Gannotskaya, UVKs Marketing & PR Director presented the report entitled Role of Logistics in Cost Optimization. Advantages of Outsourcing Logistics Services

The title of the report proved of quite an interest from the attendees, as in the circumstances of the continuous crisis it remains urgent for many companies to find additional ways for cost optimization and extra income generation

Its cost optimization in logistics that currently attracts even more attention, as these costs impact the income (the arch-goal of any business) dramatically

Among the most effective ways to optimize costs remains outsourcing of logistics services, a practice widely used by nearly all international companies

Logistics outsourcing means buying at a 3PL-provider an integrated customized solution on inventory management, transportation, warehousing together with all other related operations

A fundamental distinctive feature of UVKs proposal regarding logistics outsourcing, in contrast with other market players, lies in enjoying a differentiated industry-focused solution and the highest reachable (in the present-day local conditions) service level

Who needs a logistics outsourcing?

Firstly, those are Ukrainian companies wishing to expand for instance, to grow from a regional level to a nation-wide coverage. In this case a logistics outsourcing is required, first of all, by such growing companies where time costs related to organization of in-house logistics system appear even more substantial

Secondly, logistics outsourcing is required by big companies, who understand that can reach a maximum performance only through reducing a products cost

An in-house logistics normally imposes an extra burden on a products costs. A company has to incur expenditures of logistics department, including truck fleet and warehouses, around the year, with no relevance whether those assets are loaded or not

Thirdly, a 3rd-party logistics operator can in many aspects assist local producers, whose core activities are dependent on imports of raw materials and spare parts and distribution of finished goods

In this context we are speaking of a full range of delivery services to and from a border, customs clearance of cargos, warehousing and even keeping certain level inventory of raw materials or finished goods, upon a Customers request

A logistics operator proves more than in-house logistics departments motivated to improve performance of own operations. An LSP is directly liable for a service level (normally worded in an SLA Service Level Agreement), providing a legal warranty

Optimization of costs, while shifting to a logistics outsourcing, takes place, as fixed costs transfer to variable ones, which enables you to manage your products price more effectively (discounts, margins, credits, bonuses, auctions etc.). Owing to that, you have more instruments, with which to interest a wider range of your target customers, expanding the availability of your assortment in a market

Outsourcing: what are its benefits?

- An owner or top-management of a business gets the opportunity to focus all their resources on a core activity

Delegating your secondary, non-core functions over to a logistics provider, you minimize your operational costs, the top-managements major tasks remaining to gain maximum effects from a business

-Optimization of a customer companys personnel on account of reducing an auxiliary staff and, as a result, cutting a part of operations expenditures or transferring them from fixed to variable. Among otherwise, those are substantial savings on taxes and other mandatory payments

- Refusal from own logistics capacities truck fleet, DC etc.) and, as a result, liberating more cash, reduction of tax burden in terms of property, depreciation etc.

- Diversification and de-centralization of business while shifting to a logistics outsourcing substantially reduces financial, operational and overhead risks. You gain the opportunity to re-distribute own resources, directing them to the issues where theyll create a more added value, in result of which capitalization of your company grows

- Implementation of outsourcing contributes to a companys reputation in the eyes of your prospective partners and investors, as this increases an investment attractiveness of a business

- Shifting to outsourcing should ensure your company an in-flow of innovations, new technological, managerial and business solutions, which enables you to apply worlds pioneer practices in employing non-core assets

- Liberating more cash will enable you to re-distribute it with a most value for a strategic, long-term development of your company

You gain the opportunity to buy better solutions, applying them on a project basis. You can invest the best practices out of the freed cash, with no need to be credited

We invite all prospective partners for the dialogue, in result of which we, as a leader of the integrated outsourced logistics services market, can propose customized solutions for optimization of your business processes, increasing by that your profit margin and improving your daily performance