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Team how do you manage best third-party logistics for remote operations and minimize on cost outages?

The company i work for specialises in contract mining among other areas of interest, and the most headache that we have is cutting costs related to logistics. This is a remote area in Africa with access roads that will give the worst of driving experience. Your opinion is most is most welcome

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Question added by Albert Mutaranganyi , Mid Level , Brands Consumer Group
Date Posted: 2013/04/30
PRADEEP MEHRA
by PRADEEP MEHRA , CEO , Angel international Inc.

Looking into the dynamics of business Internationally.
It is much economical to outsource services that are readily available.
This would definitely cut on the fixed costs to your company.
Such strategies has helped sustain through recession and have shown consistent growth even when world economy is very slow, only because they use logistics or specific services when needed and do not have to carry costs of maintaining infrastructures when there not enough business to pay for their costs.
Secondly such service organizations have specialized experience and infrastructures that may provide more efficient services than your own infrastructure in case of small and medium size organizations particularly.
These services are available at low costs due to the competition within their own industry.
They are available at a mere phone call and are thus remote controlled.
In my opinion this is why & how a team would employ and manage third party logistics or services and add to their profits by cost cutting strategic contributions.

Terrence Walmsley
by Terrence Walmsley , Owner , The Awesome Group of Companies

Know the business. Enter into a Service Level Agreement (SLA) that defines costs and process requirements.

ensure that outputs are measured daily and that processes that fail are quickly identified to stop fund leakages.

The logistics component of the SLA would cover off on the remote operations requirements in relation to transportation.

Sanjeev Madavi
by Sanjeev Madavi , Vice President - SCM & Head of IT for the 4PL Consortium , Bahwan Cybertek LLC, Muscat, Oman

The essentials in a 3rd part logistics setup is the need for the customer to outsource their logistic operations.
The reasons could vary from not having enough in-house expertise to cost reduction.
Having said that, a 3PL will try to harness the maximum potential by utilizing services across a group of customers instead of a single dedicated setup where in the pooling and sharing of transport network yields possible reductions in costs.
In this case however the service levels and material lead times usually take a beating as every customer has to adjust to the 3PLs common shared services and lead time norms.
Cost and Speed of service are usually on the same sides of the spectrum and hence if you try to reduce costs the speed will reduce as well and vice versa.
3PLs claim maximum benefits in developed geographies where the infrastructure is good and their transport network (meaning trucks and warehouses) is in-depth.
For developing geos however, the challenge of not having good and credilble infrastructure (meaning roads and related facilities that make it easy to move goods from 1 point to another) as well as the lack of concentration of a customer pool (less customers meaning less transport volumes, hence lower economies of scale) can greatly reduce the chances of achieving logistics costs reductions.
This then brings you back to the whiteboard on how you can try cost reductions.
Their is no defined 1 solution that fits all and the answer is typically a brain wave (and a bulb in your head) which can initiate some other changes.
Think in terms of the organizational setup, your transportation strategy, have you explored all possible alternatives towards different modes of transportation - try water if you have riverways or railways or a combination if road facilities are poor, try full truck loads instead of LTLs, try improving the capacity of the trucks with small changes to the design, try collaborating with other companies close by to harness common infrastructure and larger volumes, the list can go on.
Creative thinking and its application to different areas be it org setups & facilities, processes and workflows can unravel solutions which could be very well within our grasp and provide dramatic changes.

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