Outsource, But Don’t Lose Control of Your Dairy Export Supply Chain

Research suggests third-party logistics providers with specialized knowledge in dairy exporting can help.

Editor’s note: This is the third post of a three-part series presenting research findings by USDEC on successful export supply chain management. 

To manage your export supply chain, it can make sense to outsource some of your logistical needs and concentrate on other things that make your company a success, such as procurement, research and product development. 

According to U.S. Dairy Export Council experts, research reports suggest third-party logistics providers with specialized knowledge in dairy exporting can play an important role.

“By collaborating with third-party logistics providers, many companies are able to improve their warehousing and transportation services to better meet customer needs,” says Ross Christieson, senior vice president of research and analysis at USDEC.

A research study conducted by USDEC found that many U.S. dairy exporters do not capitalize on possibilities inherent in third-party logistics providers, opting to work instead with freight forwarders to help manage their dairy export supply chain.

The reliance on freight forwarders contrasts with the New Zealand dairy model. New Zealanders rely on third-party providers (3PLs) and 4PL integrators who assemble the resources, planning capabilities and technology of organizations to design, build and run complex supply chain solutions.

In general, 3PLs and 4PLs have become increasingly important due to:

• The internationalization of operations and trade, necessitating complex transportation services.
• The increasing focus of manufacturers and retailers on their core business competencies.
• Economies of scale 3PLs can provide.
• Productivity gains derived from the managerial and technological expertise provided by 3/4PLs.

Retain control of core strategic functions

Another benchmark study, the 2013 PwC Global Supply Chain Survey, showed that leading companies outsourced production and delivery while retaining in-house control of core strategic functions, such as procurement and research and development.

“It’s the age of specialization. Stick with what you are good at and outsource where you can,” says USDEC's Christieson.

This concludes our three-part series on export supply chain management. The series includes:

• Manage Your Supply Chain as a Strategic Asset.
• Focus on Customers to Improve Your Dairy Supply Chain
• Outsource, But Don’t Lose Control of Your Supply Chain

Learn more: Related articles on the export supply chain have appeared in the U.S. Dairy Exporter Blog:

• California Dairies Etches Bold Vision in Crystal Globe
• Supply Chain Tips from an Award-Winning Exporter
• Editor’s Advice to U.S. Dairy Exporters: “Be There”

The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.