Advantages of an asset based versus non-asset based logistics program
To better understand your logistics service partner it is important to know if your business is being outsourced by your logistics service partner to another company. Has your service provider accepted your business only to outsource it? Its a common scenario and one that can cause headaches if an ironclad service level agreement isn't in place and perhaps more important is the operating level agreement between the two logistics companies; the level of absolute quality that is or is not guaranteed by the actual service provider.
The idea of your inventory being managed by a company that you are not in direct relationship with, can and should be concerning. So we have put together this post to give a better understanding of the value of working with an asset-based logistics partner, that doesn't outsource.
Non-asset based businesses rely upon the material handling skills and warehouse management of asset based businesses. In recent years it has been the trend to outsource to non-asset based businesses the critical logistics operations of e-commerce businesses. The impacts of this should be closely monitored as control and oversight falls on the execution of service-level agreements and operating level agreements.
And while there are many websites and applications now promoting on-demand warehousing & on-demand logistics services, there is an absence of oversight and direct management to ensure these operations are running with the ethics and quality a supplier or global seller demands.
While the Uber-ization of logistics seems a novel idea, it is frankly nothing more than the next big trend for application developers who have for years attempted to infiltrate the logistics and freight forwarding business with democratized web services. The challenge with this will be maintaining quality across networks that are poorly monitored for performance and deliverables.
Amazon FBA is the model and this trillion dollar behemoth built itself upon sound logistics principles giving it the advantage it has in today’s market as the ultimate fulfillment solution.
What has made Amazon so successful is that it is indeed an asset-based logistics operation which brings me to the advantages of an asset-based logistics partner.
An obvious advantage of working with an asset-based logistics partner is communication.
1. Communication is critical and the execution of your logistics project depends upon it. We’ve all heard the parable of lining up 100 people and sharing a message on one end and allowing each person to pass it on to the next. The message at the end of the line is never the message given at the beginning. The point here is that when working with a non-asset based organization, more often than not communication moves through multiple channels and opens itself to error and miscommunication.
We implement tools like statement of work to augment project training and process flow to ensure your logistics operation or variance from the standard is met with 100% accuracy.
2. Trained and qualified personnel are another aspect that business owners should consider seriously when evaluating a non-asset based approach. Public warehouses are notoriously low paying and warehouse workers are often poorly vetted without the necessary criminal background checks conducted or the right qualifications obtained.
Our warehouse workers are properly vetted with all the necessary local state and federal background checks and are paid well for the skills and quality of work brought to our organization. Members are trained extensively on projects and we implement a process of continuous improvement to reduce error and inefficiency while executing customer projects. We embrace a cultural of continuous improvement, analyzing processes repeatedly to eliminate gaps, choke points, and generally poor performance in order to perform at a high degree of excellence continually.
When it comes to your business, there is no substitute for Quality and with an asset-based logistics company its imperitive to have an SLA that meets the expectations of your business and as an Amazon Solution Partner, you can be assured that our SLA is to the highest standards!
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