In-house Vs. Outsourced Logistics – Which Is Better?
With logistics being the spearheading element of organization and implementation within a complex operation, choosing between in-house vs. outsourced logistics should not be taken lightly. After all, both directions may offer an array of value in distinct ways, but one might be more favorable than another based on your business needs, objectives, and growth rate. For more insight, below is a comprehensive breakdown between in-house vs. outsourced logistics so you can get a more transparent picture of which might be the better option for yourself to reach your organizational goals.
In-house logistics is when you, the owner, handles all the materials, products, and orchestrate the fulfillment process within your own organization. Though this might be ideal for a startup, sometimes it is not the best option for those who are growing or are already too large to handle it all themselves.
- Typically saves money if you are a very small business
- You have full control
- Easier to personally connect with new customers or ‘early adopters’ of your company
- Can change shipping methods and procedures smoothly
- Time-consuming and can provoke schedule challenges
- May require hiring more employees to keep up with the uncertain rising demand
- Full responsibility and high stress
- Takes away focus from other critical and core business needs
- More expensive bottom line in many cases
Outsourced logistics is when a business or organization hands over their fulfillment process to a respected external resource to handle. They take over that area of the business and help businesses optimize their efforts by working as a 3PL partner. Though this is great for just about any sized company, keep in mind that it does entail extra budgeting and trust.
- Saves time for you to focus on the core competencies of the business
- Can scale employee labor much better and productively
- Increased likelihood of customer satisfaction due to faster delivery and expert fulfillment skill levels
- Less (no) space needed for inventory
- It can cost more than doing it yourself if your work flow is very unique
- Relying on another resource to do your fulfillment can feel nerve-wracking
- Less flexibility with processes due to contractual agreements
- Potential managerial friction between companies
Which is Better?
Whether you are a newly formed business or a well-reasoned one, there is no denying that logistics play a fundamental role in your success. Of course, both have their own set of pros and cons, and the reality is that the best one for your business boils down to personal preference and how much you would like to carry yourself. If you would like to perform all the actions in-house, that is perfectly fine. But never forget that there are reputable and valuable resources that can take the logistics burden off your schedule so you can focus your attention where it is needed the most, growing your business.
In summary, the choice is yours, and if you choose in-house now, know that you will still have the option to expand later with outsourced logistics if your business becomes too large to handle on your own. And when or if you are ready to get started with pairing up with the best ones available, contact Prime Penguin. This platform is able to scan and connect you with quality assured and well-vetted 3PL partners that can allow you to optimize your business, rise above the competition, and always be ten steps ahead.