Look around you. If you are at home, perhaps you see furniture, a television, books, newspapers and a rack of CDs. If you are at college, you are probably close to desks, computers, stationery and even a photocopier; not to mention the everyday essentials such as clothes, food and drink. So how did all these very ordinary objects, that we all take for granted, get from the manufacturers/farmers/wholesalers to your living room or college?
Who makes sure that the supermarkets don’t run out of your favourite crisps and they are never past their sell-by date? Who organises it so that the photocopiers always have enough paper and that the engineer sent to fix it has the right components? Who delivers the parts – in the right order, at precisely the right time – to the assembly lines, so that your car can be manufactured?
The main providers of these services are known as logistics service providers (LSPs) – specialist companies that organise the supply of the products needed for industry, commerce and all aspects of everyday life. You will also see them referred to as supply chain specialists and logistics companies.
Some manufacturers or retailers continue to organise their own supply chains but, increasingly, more and more are coming to understand the advantages of outsourcing this very important aspect of their business to a specialist company. That way, they can concentrate on their core competencies related to their own product and take advantage of the LSP’s core competency of supply chain management.
Advantages of LSPs
Companies that are dedicated to designing and operating logistics supply chains have resources and knowledge which no ordinary manufacturer has access to. LSPs continually build on the skills and experience they gain with one client to not only develop better systems for that particular client, but to also use that expertise when designing solutions for other clients. It is about sharing skills, resources and expertise to ensure best practice is standard across the company.
A specialist LSP also has access to all the latest IT developments, which are so important to the whole process of moving goods throughout the supply chain. Knowing where the goods are at any point in time is just as important as physically moving them there. Some of these IT packages are bought off-the-shelf but most are adapted by the LSP’s in-house teams to precisely fit the needs of each particular client; some in-house teams will design parts of their own IT package from scratch.
The LSP also has an in-depth knowledge of materials handling equipment, vehicles and other specialist equipment. This knowledge is used to ensure the most efficient vehicles are used for a particular task, whether in the warehouse or on the road.
LSPs will usually have specialist teams for different aspects of the business (eg warehouse design, traffic management, business development, operations, IT) but they all work together – and learn from each other – to the benefit of both the LSP and all the clients.
A good LSP is not afraid to challenge its clients and will even suggest, where necessary, that clients change their way of working if it will bring significant benefits to the company overall. As outsiders, an LSP team brings in a fresh perspective and new ideas.
Sharing the cost
LSPs can also offer the cost efficiencies of a shared user network. Instead of establishing warehousing, transport and all the other support systems for each individual client, an LSP can combine these services for a number of client companies with similar needs.
The clients benefit from the combined expertise and the economies of scale and the environment benefits from the reduced number of trucks on the road making the deliveries.
The shared user option increases a client’s flexibility and is also useful for companies that experience significant peaks and troughs in business throughout the year, as well as for companies that are attempting to expand their sales into new regions and don’t want the expense of setting up a dedicated network straight away.
Logistics service providers offer a wide range of opportunities for graduates and many offer graduate trainee programmes to allow graduates to understand the business and identify which areas are of particular interest to them – whether it be warehouse design, transport planning, developing IT programmes, or managing client contracts. Obviously there are also opportunities in HR, administration, finance, marketing and training.
LSPs also offer graduates the opportunity to learn from the many experienced and talented employees who have worked in the business since leaving school and, sometimes, the chance to spend time in divisions overseas. This is an expanding business as more client companies outsource their logistics so the potential for learning and advancement is huge.
In addition, many of the job opportunities within LSPs are in customer focused environments, which can provide excellent training for graduates. This could include: working within a business development team designing and selling solutions to potential customers, managing a traffic office and dealing with customer enquiries, working in a home delivery operation liaising with the general public, etc.