Logistics outsourcing: supply chain trends for 2020

By Georgia Wilson
Supply Chain Digital takes a closer look at Gartner’s logistics outsourcing trends for 2020 and why supply chain executive should priorities outsourci...

Supply Chain Digital takes a closer look at Gartner’s logistics outsourcing trends for 2020 and why supply chain executive should priorities outsourcing. 

How has outsourcing changed over the years?

Business Leaders no longer ask ‘should I outsource?’ instead they are asking ‘how much?’. Today, more and more businesses rely on third party logistics providers (3PLs) for packaging design and management of company-owned assets. In a study completed by Gartner 45% of its respondents are now looking for 4PL services.

Outsourcing has, over the years, become mainstream 80% of Gartner’s participants plan to significantly increase their logistics outsourcing budget to more than just warehousing and fulfilment in 2020, not only to optimize cost but save money too. 

What is driving this change?

The logistics industry is a very fragmented and complex industry that is built on a lot of traditional methods. Gartner highlights a few reasons as to why executives are prioritising logistics outsourcing in 2020, including: real-time operations, speed to market, end-to-end visibility, system incompatibility, cyber threats and fast innovating technology. 

SEE ALSO:

Courtney Rogerson, Senior Principal Analyst, Gartner also notes that with “digitalisation, globalisation and rapidly evolving customer expectations, demand a shift in how leaders responsible for logistics, approach their outsourcing strategy. The task for supply chain leaders responsible for logistics, is to also know how the logistics function will be used to achieve business success.” 

What are the benefits of outsourcing?

Logistics outsourcing, with realistic objectives, can keep a business agile and customer-focused. Participants of Gartner’s survey indicated that although there are technical and cultural challenges that can limit the return on investment (ROI), it is still typically worth the money even if it doesn’t provide hard cost reductions. 

For more information on all topics for Procurement, Supply Chain & Logistics - please take a look at the latest edition of Supply Chain Digital magazine.

Follow us on LinkedIn and Twitter.

Share

Featured Articles

Supply chain global events, news and features round-up

Walgreens CPO Jim Townsend to speak at Procurement LIVE; Sustainability measurements lacking, says EY survey; Managing risk 'key' - Gartner Supply Chain

Automation 'is helping supply chain serve customer needs'

Automation is revolutionising supply chain, says Neal Gottsacker, Chief Product Officer of enterprise automation platform, Nintex

No going back on e-commerce - FedEx Express AMEA CEO

FedEx Express survey shows that SMEs and consumers in AMEA region feel there’s room for further growth in the already booming e-commerce market

Behavioural science 'key to procurement change' - Loseby

Procurement

Walgreens CPO Jim Townsend to speak at Procurement LIVE

Procurement

Managing risk 'crucial' - Gartner Supply Chain Symposium

Supply Chain Risk Management