The Ultimate A-Z Guide To Outsourcing Logistics Services

Are you looking for logistics services that increase customer satisfaction and reduce costs while giving you a competitive edge? Choosing remote outsourcing can help you reach these goals.

This guide will walk you through everything you need to know about logistics outsourcing services. It’ll dive into how outsourcing can help optimize your supply chain, lower costs, and improve efficiency.

So whether you’re starting out or are ready to take your company to new heights, read on for essentials on outsourcing your logistics!

Let’s kick things off with a definition to clear things up, shall we?

What is outsourced logistics, and does your business need it?

Logistics outsourcing involves contracting your business’s supply chain activities and functions to a third-party logistics provider (3PL). It means the 3PL partner runs and manages its own warehouse and can offer essential logistics services to your company.

Here are several relevant logistics services you can outsource to a 3PL.

Do you need to outsource any of the above services? According to Gartner’s 2021 survey of logistics professionals: “74% of logistics leaders expect their logistics outsourcing budget to increase in the next 2 years.”

The report also mentioned that logistics leaders have three top priorities.

  • Improve or update technology (37%)
  • Cost reduction/cost optimization (31%)
  • Increase customer satisfaction (29%)

Partnering with the right logistics service providers will help you reach the following-

  • Outsourcing your logistics back-office support allows you to focus on your core competencies.
  • By outsourcing order fulfillment, you can save money and enhance your efficiency.
  • Also, logistics outsourcing services can help you expand into new markets and grow your operations at lightning speed.

But you may wonder if there’s a difference between logistics and supply chain management. Let’s explore the two functions.

Logistics vs. Supply chain management (SCM): What’s the difference?

“Logistics is a process of moving and handling goods and materials, from the beginning to the end of the production, sale process and waste disposal, to satisfy customers and add business competitiveness.” -Researchgate.net

SCM involves planning, executing, and controlling supply chain operations. It aims to provide maximum customer value and minimize waste.

The supply chain includes all activities from procurement to delivery. And logistics management is a vital part of your SCM.

Identifying the two is easy with the following points.

Logistics and SCM: What are the similarities?

  • They deal with goods, services, and information.
  • They ensure your company gains a competitive edge.
  • They support your efforts to satisfy customer needs.
  • They handle the same flow of goods from the supplier or producer to the final user.

How does logistics outsourcing work?

Logistics business process outsourcing (BPO) services ensure efficient management and movement of your goods and services in the supply chain. Here’s how.

Information

Logistics outsourcing provides you with critical details to help you know the status of each product and supply chain activities. It improves your inventory management.

Storage

It ensures you do not overstock or understock merchandise by ensuring you have the right quantity at the right location. You can maintain the correct balance between demand and supply.

Warehousing

3PLs have their own warehouses to offer services like receiving, packing, and shipping goods.

Handling materials

It covers the storage, safety, and movement of goods from suppliers to distributors and end-users.

Packaging

It’s a vital logistics function that ensures your products reach customers undamaged and at a minimal cost.

Unitization

Material handling equipment ensures the logistics partner transfers your goods efficiently without causing damage.

Inventory control

By using storage and warehousing methods, you can store goods in a specific location to maximize their quality and quantity. Inventory management formulas can help you determine and manage demand.

Transportation

As part of logistics, you can move your goods along the supply chain using several modes of transportation.

What are the three types of logistics?

Logistics services are largely divided into three main types.

  • Inbound logistics
  • Outbound logistics
  • Reverse logistics

Inbound logistics

Inbound logistics involves taking in and handling materials arriving at your company. It can include tasks like receiving, inspecting, and storing incoming resources on time for production.

Procurement plays a significant part in inbound logistics. That’s because it’s concerned with sourcing and transferring raw materials from your supplier to your factory.

You must partner with a logistics outsourcing provider to minimize risks and enhance inbound logistics.

Flowz specializes in logistics management by offering you back-office support. It can provide services such as processing and auditing your inbound logistics bills. As a result, you’ll have more freedom to focus on other critical tasks in your business.

Outbound logistics

Outbound logistics includes all activities that aid the movement of finished goods from the factory to your final consumer. It involves warehousing, transportation, and distribution.

Distribution is significant in outbound logistics, sales logistics, or order fulfillment. It ensures you deliver the right product at the right time to your end-user at a low cost. And its objective is customer satisfaction.

For example, e-commerce stores like Amazon invest heavily in outbound logistics to accelerate the last-mile or same-day delivery to their buyers.

Outsourcing Flowz back-office support involves taking care of your outbound logistics expenses. Examples include warehouse costs, docking charges, and insurance fees. You won’t burden yourself with handling these petty costs.

Reverse logistics

Reverse logistics is the process of returning goods to their point of origin. It can occur due to product recalls and damaged or defective stock.

Sometimes, the product may need repairs or refurbishment before you can resell it. Regardless, reverse logistics is an essential part of the supply chain.

Outsourcing to a third-party logistics (3PL) provider is the best way to handle your reverse logistics. A 3PL has the necessary resources and infrastructure to manage the return of goods efficiently. As a result, it can help enhance customer satisfaction and reduce costs.

You can also avoid the hassle and expense of managing returns by outsourcing Flowz back-office support.

What are some reasons your firm might outsource logistics?

Logistics BPO services result in massive cost savings for your company.

Lessens overall logistics expenses

Businesses that use 3PLs say that they have enjoyed slashed logistics costs, according to the 2021 State of Outsourcing Logistics Report.

As your logistics partner, Flowz will monitor your costs and timeliness. It’ll ensure your cargo gets to your customer at the right time at a lower cost.

Eliminates the need for additional infrastructure

You don’t have to invest in storage facilities when you outsource logistics. 3PLs have the resources to cater to your needs. And if you’ve got a win-win relationship with a logistics outsourcing firm, they can build the infrastructure for you.

Removes hassles of establishing your own logistic systems

Effective logistics needs up-to-date warehousing and transportation management processes. They include buying and maintaining software like warehouse or inventory management applications.

Flowz is well-equipped with state-of-the-art logistics software to manage your supply chain operations.

Helps you avoid investing in a fleet

A 3PL with dedicated contract carriage can offer you a private fleet. As a result, there’s no need to own and manage trucks. Owning a fleet involves hiring drivers, meeting legal requirements, and compliance. You can avoid all these challenges.

Enables you to cash in on freight purchasing power

Outsourcing logistics services can significantly reduce your operating costs per load. These companies usually leverage their total freight to bargain for lower carriage costs from transporters

Helps you enjoy shared freight expenses

3PLs can combine your load with other shippers going to the same location. For example, a truckload can contain goods for multiple shippers. As a result, it can trim freight costs by a large margin, leading to cost savings for you.

Passes freight liability on to other parties

Your logistics carrier is responsible for the driver’s pay, physical damage of goods, and liability for incidents. So you’re free from this burden when you outsource logistics.

You can also elevate your customer service when you partner with Flowz Logistics Outsourcing Services. Here’s why.

Boosts your last mile delivery

The 2022 State of Logistics Report says that last-mile delivery is on the rise, with e-commerce stores accounting for 10% of the growth. A logistics outsourcing company can use its vast resources to deliver your products faster and at the right time to meet consumer demand.

Keeps your customers updated

Flowz uses tech-savvy software like shipper IT systems, Enterprise Resource Planning (ERP), and Warehouse Management Systems. As a result, it becomes easier to handle notice of exceptions and to keep your final user updated.

Finally, outsourcing to third-party logistics providers can upgrade your business’s performance. Here’s how your company benefits.

Broadens your understanding

Companies like Flowz work with multiple logistics leaders, shippers, and industries. Because of this, they know the ins and outs of the logistics sector and its trends. They can use this vital information to improve your processes and decisions.

Helps you zero in on your core competencies

Look, the SCM and logistics industries are complicated and involve a ton of systems that can overwhelm your business. You don’t have to carry this burden when outsourcing Flowz logistics services.

You can work with Flowz to get full back-office support to handle all your routine and repetitive logistics activities. One example is real-time tracking of your cargo or loads. You’ll stay up to date with your cargo movement along the supply chain.

However, a 3PL isn’t the ultimate solution to your logistics needs. It comes with its own challenges.

Challenges of outsourcing logistics services

  • You must transfer your customer relations and communication to a 3PL. It means you may lose a bit of control over these functions. And if an order arrives late for your client, they’ll blame you instead of your logistics partner.
  • So it’s crucial to carry out due diligence before you settle for a 3PL.
  • A shoddy service from a logistics provider can lead to higher costs, poor customer service, and supply chain bottlenecks.
  • It can be expensive to contract a 3PL if you ship orders or parcels of less than 1000 units per month. You won’t break even.

Choosing the right logistics outsourcing partner can eliminate these drawbacks. Flowz’s highly trained logistics professionals can help you become a market leader in your sector.

How to outsource logistics: What should you consider before you sign the contract?

Here are 3 critical considerations for your logistics company.

1. The logistics outsourcing company must match your business model

First, explain your company’s needs to the logistics partner. What services do you want? For example, Flowz offers complete back-office support for inbound, outbound, and reverse logistics.

2. You must receive a water-tight service guarantee

Your preferred logistics provider must provide you with a robust service agreement. It must guarantee a high error-free rate in meeting customer needs.

The contract needs the following crucial details:

  • Terms and conditions
  • Coverage for delays and breakages
  • Service charge details
  • Timelines
  • Backup plans

Flowz is trusted by global logistics companies due to its transparent service agreements. The company will ensure you understand all the terms and conditions of your logistics agreement.

3. The logistics partner must have the right technology

One of the top trends in logistics is the internet of things (IoT). It’s “a connection of physical devices that monitor and transfer data via the internet and without human intervention.”

The outsourced logistics company needs an IoT platform to enhance visibility throughout the supply chain. It can boost transparency, real-time visibility of products, and inventory management.

When you work with Flowz, you’ll be able to track your cargo until it reaches your customer.

Get started with Flowz logistics services

You’re not alone in the logistics industry—Flowz’s Logistics Outsourcing team can collaborate with you to achieve the following.

  • Cost reduction/cost optimization
  • Increasing customer satisfaction
  • Providing relevant data and analytics throughout the entire supply chain
  • Gaining a competitive edge
  • Designing, building, running, and measuring your logistics functions

If you choose to outsource Flowz’s logistics services, here are the services you can expect.

  • Overseeing supply chain operations
  • Managing inventory, storage, and transportation
  • Analyzing and optimizing logistical procedures
  • Reviewing, preparing, and routing purchase orders
  • Ensuring safe and timely delivery of shipments
  • Monitoring costs, timeliness, and productivity of shipments
  • Addressing shipment and inventory issues
  • Liaising with suppliers and retailers
  • Identifying process bottlenecks
  • Suggesting solutions for improvement
  • Coordinating with the logistics department
  • Tracking KPI
  • Generating and providing quotes to customers
  • Preparing customs and shipping documents
  • Updating retailer and customer systems

Stop burdening yourself with the complexities of managing your logistics services. Choose Flowz as your go-to remote logistics service provider today!

9 Compelling Reasons Why Insurance Outsourcing Can Help Scale Your Business

In today’s competitive insurance industry, you need to look for effective ways to reduce costs and improve your bottom line. One of the best ways to do this is through insurance business process outsourcing (BPO).

You can adopt this strategy to lower expenses, increase efficiency, and improve customer service. Insurance BPO allows you to focus on what you do best while outsourcing the rest.

In this blog, you’ll discover 9 ways insurance BPO can help you with a robust back-office service support system.

What’s the state of the insurance industry today?

The insurance industry has faced many challenges as a result of the pandemic. According to McKinsey’s recent report, firms are experiencing declining revenue growth, low productivity, and fierce competition for tech-savvy customers.

Deloitte also examined the insurance outlook for 2022 and beyond. Its findings highlighted the following as additional headaches for your business.

  • Inflationary pressures
  • Sustainability matters (climate risks)
  • Diversity and financial inclusion
  • Changes in customer products and buying preferences
  • Attracting and hiring top talent
  • New technologies to enhance the customer experience

However, there is a silver lining for you as the same report shows the sector could grow by 3.9% globally. So it’s not all gloom and doom—you must change your approaches to overcome challenges, win new customers, and remain relevant.

Insurance business process outsourcing is the perfect strategy you can use to accelerate your growth and boost market share.

What is business process outsourcing?

Business process outsourcing is the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administers, and manages the selected processes based on defined and measurable performance metrics.”

You can engage an insurance outsourcing company or third-party vendor as a strategic partner to manage your IT-based insurance services. For example, Flowz (OB) can provide back-office service support to help you focus more on strategic planning and implementation.

According to the PwC insurance outlook report, the following can help you expand and meet customers’ ever-changing needs.

  • Leverage data and the latest technology to provide users with a seamless experience from quote to sale and claims.
  • Innovate products to satisfy unserved or underserved market segments.
  • Adopt a lean structure to slash operational costs and improve the bottom line.
  • Set up an integrated ecosystem through a partnership to provide an efficient distribution service.
  • Outsource a third-party vendor, such as other carriers or distributors.

Thus an insurance BPO is a valuable asset to help you achieve your business objectives. Now let’s explore how you can maximize a strategic collaboration with an insurance outsourcing company.

9 Ways insurance BPO can help you thrive against all odds

1. Handling the quote process

Your company needs an efficient and user-friendly system to process quotes for your potential customers. It ensures that you respond faster to their queries, leading to happy customers.

But it would be more productive to partner with a business processing outsourcing company.

An insurance BPO can deploy a virtual insurance agent to manage your routine and time-consuming tasks like quote summary and proposal. Because Flowz also uses the latest software to process these documents, your new clients can receive help at lightning speed. As a result, you can boost your insurance back office support, which in turn, increases productivity and allows you to zero in on core responsibilities.

2. Document indexing and filing

Data management is another challenging activity for your company because it involves organizing and analyzing huge volumes of data. Human errors can occur, and this can compromise your decision-making and data security.

However, you can outsource document indexing and filing to a back-office service support company.

An insurance outsourcing partner has professionals who understand the ins and outs of the entire insurance index filing process. They also use cutting-edge tools to manage all data processes efficiently. Because of this, you can have credible information while making huge savings on costs.

3. Billing and accounts receivables

As McKinsey reports, insurance businesses like yours are experiencing revenue growth challenges. In addition, cash flow mismanagement, missed payments, and late delivery of invoices are potential drawbacks in the sector.

To deal with these problems, you must have an effective billing and accounts receivables mechanism.

You can work with an insurance business process outsourcing company to handle all your accounting tasks, such as bank reconciliation. It gives you access to experienced accountants and proper accounting and bookkeeping software. A well-oiled back-office support system improves your cash flow and revenue margins.

4. Loss run processing

To ensure quick loss run processing, there are several things that you must fulfill. First, you need experts who can prepare accurate reports to allow you to make informed decisions. Secondly, you should have high-performing software to capture error-free data.

Thirdly, specialists need to examine your reports to assess the potential insurable risks.

All these detailed activities can be overwhelming for your company. A BPO with skilled personnel (virtual insurance agents) and the right tools can come in handy to shoulder these responsibilities. An Flowz insurance service delivers a cost-effective loss run processing system to ensure it’s on time and elevates your customers’ experience.

5. Renewals processing and managing the renewal list

Policy renewals play an essential role in retaining your customers and ensuring that your business continues to receive income. It means that you need a timeous renewal process and to keep an updated list.

It’s pretty clear that the more sluggish your system is, the more costly it will be. You can lose thousands of dollars.

But you can have peace of mind when collaborating with an insurance outsourcing service. Business process outsourcing can take charge of your renewal processing and manage your renewal list. It can also help you retain customers and improve your bottom line with the right software and customer-focused service.

6. Claims management and follow-up

The more your business expands its portfolio of insurable risks, the more claims you are likely to receive from your clients. And when they file claims, customers expect a quick response to show you are more interested in their welfare.

In addition, you have been flooded with an avalanche of claims since the start of the global COVID-19. You are also at the mercy of internet fraudsters making false claims.

How can you navigate this rough terrain and ensure you have a water-tight claims management process? A third-party insurance vendor can come to your rescue and handle the claims lifecycle, provide clients with a 24/7/365-days service, and assess claims to minimize fraud.

7. Certificate of insurance process services

For your business to survive the cut-throat competition in the insurance sector, you need to concentrate on your core competencies. You can do this by outsourcing repetitive administrative tasks like the certificate of insurance services (COI) to Flowz insurance specialists.

BPO enables you to put more effort into developing groundbreaking strategies to stay ahead of your peers.

A back office support system can process, validate, and disburse COI in line with your insurance industry guidelines. Well-trained insurance BPO staff can ensure your customers receive accurate certificates of insurance well on time.

8. Policy checking and policy servicing

As a carrier, you are inundated with countless policy applications and renewals. Plus, your in-house team must verify every document to see if customers have provided all the relevant information. It’s a tedious process.

You are better off with an insurance business process outsourcing partner. They can manage policy checking and servicing to offer your clients an optimal insurance service.

And they can create quotes and proposals, process business renewals, and keep your company’s electronic records up to date. As a result, you can use your time to zoom in on finding more customers.

9. New business setup

You could have a brilliant idea to launch an insurance business but be unsure of the whole process. And entering this sector may look straightforward on paper. However, you must satisfy several regulations, apply for a permit, and understand your target market.

Due to a highly competitive market, you need solid strategies to stand out from the crowd.

Luckily, an insurance BPO can deploy experienced virtual insurance specialists like insurance marketers, robust business planners, and excellent market researchers to make things easier for you. They can handle your new business set up to help you scale faster than you would if you did it alone.

Why Flowz’s insurance outsourcing services can benefit your business

One of the crucial highlights from the PwC report is that you must work with strategic partners to maximize your expansion. OB is well-positioned to play this role in offering you back-office service support for your insurance company.

You can benefit from the company’s outstanding achievements, which are:

  • Over 20 years of experience in claims administration as back-office service support for insurance companies
  • Experienced professionals who grasp the insurance sector inside and out
  • Latest insurance software and a customer-centric approach
  • A trusted partner of leading insurance companies

OB provides insurance agencies and carriers like yours with best-in-class services and customized software.

What’s more, you can work with qualified and pre-screened staff to complement your internal team. They act as your company’s extension.

Alternatively, you can work with full-time or part-time employees one-on-one. It helps you find the best and most valuable solutions for your business.

Wrapping up

Insurance business process outsourcing (BPO) is the preferred choice for you to expand your business. You can outsource repetitive and routine insurance tasks when you work with a strategic partner.

Back-office service support for insurance companies can help you focus more on your core skills while enjoying substantial operational savings. Schedule a call to discover how Flowz can set you up for success.

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