Thursday, December 04, 2008

The Pony Express and Outsourcing Logistics

The outsourcing of logistics is really nothing new, corporations have been doing it since the 1800's choosing to use the US Pony Express over their own internal resources to ship parcels. But since the days of cowboys and Indians, we've gotten more global and things often need to be delivered in hours rather than days and weeks. With this logistics outsourcing has become more complex, which is why it makes more sense now then ever to hand it off to a logistics provider that is going to invest and build up its capabilities instead of maintaining the status quo. Cementing this reality, earlier this week IBM signed a multi-year contract with the French logistics provider, Geodis, to manage all of IBM's logistics needs globally. So instead of IBM managing hundreds of logistics providers, Geodis will do it for us. Helping them to achieve this will be most of the internal IBM logistics professionals that have been doing it for IBM for years. IBM employees from more than 50 countries will tranfer to Geodis over the next several months after all local country agreements have been achieved. Why you might ask? Well like I said earlier, its Geodis' core business. They will grow and make investments in logistics that wouldn't make sense for IBM. This may sound familar. IBM signed a similar agreement with Geodis back in 1998. Back then they took over our needs for Europe and acquired are European warehouses. So in a sense, this is the evolution of that effort.


Unknown said...

Thanks for this and other interesting posts on supply chain management. In the post you mention that IBM employees from several countries will transfer to Geodis. Is this a permanent transfer? Will these employees now be within the organizational structure and under the payroll of Geodis?

Christopher Sciacca said...

Yes, to both of your questions. You can read the press release here

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