The top management requested UC Strategy to review the existing logistics model for both domestic and exports and required solutions for the following key strategic questions:
- Should the company outsource domestic and export logistics or continue to manage it internally?
- Is there a requirement for constructing a consolidated warehouse or individual warehouses at the different manufacturing units to store finished goods?
- If it needs to outsource then which components should be outsourced and to which service provider?
To review the company’s logistics model, and to make strategic suggestions, UC Strategy approached in the following manner:
- Prepared a request for proposal and conducted an initial round of discussions with a total of 30 domestic and export logistic 3PL players
- Provided 3PL players with requisite data and analysed cost quotes provided by them
- Conducted a cost-benefit analysis between in-house logistics and outsourcing options, and decided on an outsourcing strategy for both domestic and export logistics
- Defined quantitative and qualitative parameters to evaluate the 3PL players
- Recommended the following strategy based on the analysis conducted
- Outsource complete inbound and outbound logistics (Within Indian boundaries except for the transportation of export goods and custom clearance) to a leading 3PL provider specialising in handling chemicals
- Outsource export logistics and follow a region-specific strategy (Three players were recommended to handle different regions in the globe)
- Construct individual warehouses for each manufacturing unit and outsource the construction and management of the warehouse to a 3PL provider specialising in warehouse construction and management
UC Strategy delivered to the client a detailed implementation and risk mitigation plan and defined key performance indicators that need to be discussed with the selected 3PL players during finalisation of the service level agreement.