Save costs by outsourcing or insourcing

Outsourcing is a strategic model based on deciding to select an external service provider or supplier to take care of and/or perform one or more of your business activities. It can be advantageous to change from an insourcing to an outsourcing strategy (or vice versa) for your warehousing operation, distribution center or transport activities, for instance. Insourcing or outsourcing allows logistics operations to be consolidated, which in turn enables you to save costs.

SCM advice
Consulting firm Groenewout has extensive experience of supporting insourcing and outsourcing projects. When preparing our advice on insourcing or outsourcing, we consider aspects such as strategy, financial drivers, service providers’ pricing structure and expectations, and the implementation of the new set-up. Our insourcing and outsourcing recommendations include coverage of topics such as:

  • Insight into supply chain performance
  • Insight into transport and/or warehousing costs 
  • Insight into inventory levels and costs 
  • Optimization of physical supply chain design 
  • Risk analysis 
  • Adapting and embedding process changes 
  • Analysis of IT capacities and necessary adaptations
  • Just as with all of our recommendations, we focus on practical solutions and realistic implementation. We can also provide help and support with the roll-out.

Outsourcing Boehringer Ingelheim’s logistics
In order to give you a sense of our approach when providing advice on insourcing and outsourcing, we are pleased to outline a project we completed for Boehringer Ingelheim. This manufacturer of pharmaceuticals for human and animal health had its own warehouse in Verviers, Belgium, serving the Belgian market. Meanwhile, the Dutch operation was outsourced to a logistics service provider in Utrecht, The Netherlands. Boehringer Ingelheim enlisted our help in researching the optimal distribution concept. We supported Boehringer Ingelheim by conducting a feasibility study into whether or not to consolidate the activities.

The study concluded that the best solution would be to centralize the logistics. We subsequently supervised the logistics tender process during which logistics service providers were asked to provide details of their service offering and rates. We then supported the implementation of the logistics outsourcing project. Boehringer Ingelheim has since merged its logistics operations in Belgium and The Netherlands and now outsources them to a German logistics service provider.

More insourcing and outsourcing references: 

  1. Boehringer Ingelheim 
  2. Forbo
  3. Haribo
  4. Reining 
  5. Siemens

Would you like to know more about the insourcing or outsourcing possibilities for your logistics operation? If so, please feel free to contact our expert:

Arthur Zondervan

Arthur Zondervan
Managing Consultant & Partner
E: zondervan@groenewout.com
T: +31 6 5060 5356

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