If you're working in Supply Chain and Logistics,
one of the things you're going to get involved with
at some point is outsourcing.
And you know I've probably been involved
in about a hundred different outsourcing projects
over the years in different countries
and there are two or three mistakes that
people always make about outsourcing.
So, let me, in this short video,
outline what those are for you.
My name is Rob O'Byrne from Logistics Bureau
and rather than shoot this video in the studio,
I thought I'd come out to a local park.
But it's a little bit noisy.
You might be wondering what the noise is,
and in fact, just over here behind me,
we've got, what do you call a place where all the
live? It's not a battery, is it?
(A Camp)
There's about a thousand bats in here.
So I think we better go and find somewhere
a little bit quieter to shoot this video.
Well, look at all these guys up in the trees.
We actually only live about 2 kilometres from here,
so all these bats fly over our house at night
and it's a little bit like being in a vampire movie at times.
There are thousands of them, look at them.
Wow. Let's go and find a quiet spot,
and I'll give you those supply chain tips.
Okay, so we're a little bit quieter now,
away from all those bats.
Although, there are still hundreds of them
on the trees here, so I hope the sound's okay
on the video.
Okay, so, three things I'm going to tell you about
logistics outsourcing
where you really got to get it right.
This is where people make mistakes all of the time.
So, quick three.
Number 1, time frame.
And let's pick warehouse outsourcing.
How long do you think it takes to go through the
process of deciding to outsource,
going through all the tendering, the evaluation,
and so on, to actually picking someone.
Some people think it can be done in a month,
it can't.
You've actually got to allow at least 6 weeks, probably,
for your potential partners to put their bids together,
So I would say 5 to 6 months is a good timeframe
to go from deciding to outsource
to actually picking a partner.
That's number 1, time frame.
Second one is,
during the evaluation process,
be totally objective.
And the way I get my clients to do this
is that we structure the request for tender,
or the request for proposal,
in such a way,
and then we put together a scoring matrix,
or evaluation matrix
that absolutely matches almost
paragraph per paragraph, that RFT.
So that people can go through and score it,
and you need a number of people scoring it
across the business.
It can't be just one person's decision.
It's a big decision,
outsourcing.
You know it's going to have a huge impact
on cost, positive, I hope,
certainly on service,
so you need people from different areas of the business
giving their views on that through the evaluation.
Number 3,
and probably the most important,
and the one that people get wrong the most
is providing plenty of information
to the parties that you're inviting
to tender for your business.
Now, think about it for a moment.
You don't go to an architect and say,
"Hey, just build me a house, will you?"
You tell them how you're going to use the house,
and how many people are going to live in it, and so on.
It's exactly the same when you
outsource your warehousing.
You've got to be very, very specific
in how the operation's going to be done,
what needs to be done,
all the little curly things like,
do you have lots of returns or kitting?
And most importantly,
really accurate data in two things,
the transaction volumes,
so they can see the number of orders going out,
and the number of lines per order,
and also the product master,
because it's vital that they understand the
weights, and measures, and dimensions
of all of the products, because that's really important
in designing how the picking and storage is going to
actually take place.
So three things
that can go wrong
a lot
in logistics outsourcing, warehousing,
if you're not very careful.
Make sure that you've got enough time to do it.
Make sure that you're going to have
people across the business involved in the evaluation,
and thirdly,
make sure you share lots of information about
the operation,
so that those people bidding can get it,
get their costs and resources accurate.
And particularly,
around product volumes,
product dimensions, and all that type of thing.
Three things.
Now,
let me tell you where you can get some more
information on this, because outsourcing's really
quite tricky if you haven't been involved in it before.
Now if you're in Sydney,
and you're watching this video as soon as it goes up,
there's something really cool you can come along to.
So we'll come to that in a second.
If you're not in Sydney,
by all means, jump on to our blog on Logistics Bureau,
and there's loads of information about outsourcing.
I think I've even got
you know, sample documents and so on
that you can download.
So that's just logisticsbureau.com/blog
and somewhere around this video will be a link to that.
But if you're in Sydney,
and you're seeing this as soon as it's gone up,
You would want to consider coming along
to Supply Chain Leaders Insights,
on the 26th of October.
That's in Sydney CBD,
at a really nice hotel,
and this is not just a conference,
this is a coaching program all day,
I've got twenty experts
from right across the industry coming in.
Outsourcing is going to be one of the major topics there
And I've got Steve Thompsett coming along from DHL,
and Ben Carrick.
They're absolutely experts in 3PL and 4PL,
to coach people on how to go about that the right way.
So if you want to come along to that,
again, there'll be a link somewhere here,
Supply Chain Leaders Insights,
and all the ticket sales are going to charity.
That's really cool.
It's only $87 for the whole day,
fully catered,
and it goes to charity.
If you can get along,
you'll learn a lot more about outsourcing there.
See you soon.