Why do companies decide to use DCC services from an external provider?
Business challenges may cause a company to focus on core competencies, while they rely on a provider to create a distribution process that improves customer service. For some companies, the motivation to use DCC may be as simple as management wanting to control costs. We also hear from companies that want to expand into new geographic markets. In other cases, the challenge may be the consolidation of a transportation system after a merger or acquisition. Or, the outsourcing decision may come after rapid organic growth, requiring more shipment capacity and flexibility. Other events that stimulate the use of third-party DCC include high driver turnover, labor unrest, hours of service violations, negative DOT audits and the outlay of capital for non-core requirements like vehicles and supply chain technology. In general, its time to outsource when service demands from a companys customers can no longer be accommodated by the existing distribution system. For many companies, outsourcing DC
Related Questions
- Could the municipal service be a wholesale-only provider, and let private companies provide retail services competitively?
- What are the advantages of utilizing AISDs contracted external provider of EAP services, Alliance Work Partners (AWP)?
- Chapter Six How do companies decide what products and services to market?
