A new wave of logistic outsourcing coming…?

The outsourcing of logistic activities speeded up in the mid 90’s. However, growth has slowed down in recent years. We asked Károly Diega, supply chain director of Sága Foods ZRt. about his experience with logistic outsourcing. TM: Can you say a few words about Sága? Diera Károly: Sága Foods ZRt. is a vertically integrated player in the poultry market. It is the market leader in the branded-processed category with 1700 employees. TM: When did you begin considering the outsourcing of logistic activities? Diera Károly: We contracted an enterprise for the operation of our network of logistic centres in the mid 90’s. In 2001, a logistic partner took over nation-wide distribution. In 2006, we contracted a new partner, Nagel Hungária Kft. for all warehousing and distribution tasks. TM: What were the objectives behind this decision? Diera Károly: There were several reasons. Ensuring a high quality of service and cost reduction were the most important among these. Since contracting Nagel Hungária Kft. in 2006, we have been working with a partner who not only guarantees a high standard of service in the domestic market, but also has a European distribution network. TM: What are the logistic services performed by Nagel Hungária Kft at present? Diera Károly: Warehousing and distribution. Products are transported by Nagel Hungária to its own logistic centres, or to the customers’ warehouses directly. All tasks related to the physical handling of our products from the minute these leave our factory belong to Nagel Hungária. Our products are delivered to a total of 3 000 destinations. TM: Is there anything you would have done in a different way? Diera Károly: We have fulfilled our objectives with the help of outsourcing. We have reduced our costs and successfully maintained a high standard of service. We have managed to avoid substantial investment into fixed assets and still produced dynamic growth. In short, I am satisfied with the decisions we made.