10 Deadly Sins in Warehouse Outsourcing

The decision to outsource warehousing and fulfillment activities is never taken lightly.

This white paper describes the top 10 deadly sins in attitudes, expectations and activities during the implementation phase of outsourcing your warehouse management and warehouse management systems to a 3PL warehouse (third party logistics provider). 

Here are some of the sins:

Presuming outsourcing is the instant cure for all supply chain processes

The process of outsourcing supply chain functions comprises a journey from solution design, testing, implementation and start-up. Every stage comes with a learning curve for the 3PL as well as for your own organisation. Some processes are beyond the span of control of your logistics provider, but have a fundamental impact on the overall operation (e.g. the labels on inbound material, your own IT infrastructure and order consolidation possibilities) and need to be managed in parallel to the outsourcing project. 
Not involving all stakeholders (or too late)

Outsourcing of logistics activities is a strategic decision that will have a functional and sometimes emotional impact on a wide range of functions in your organisation. Sometimes, the Supply Chain Manager has done everything right in terms of identifying saving potential, initiating the project, selecting the right supplier, making a convincing business case and designing the optimal logistics solution. Nevertheless, many projects proposals get stuck in the board room. Without involvement and commitment at each stage in the process from all cross-functional stakeholders, including commercial, production and finance the project risks a last-minute veto on previously unaddressed objections.

– "It’s not just a supply chain party"
Overlooking non-documented processes

Over the years your supply chain organisation has developed knowledge which is not necessarily stored in systems or process documentation. For example; not capturing customer specific stacking patterns or non-documented special packaging requirements can lead to serious service issues during an outsourcing implementation project. Employees at all levels of your supply chain could have crucial, non-documented process knowledge which needs to be taken into account.

- "If it’s not on paper, does not mean it doesn’t exist"