Supply chain outsourcing dos and don’ts
We have already touched on trends associated with accurate demand planning and globalisation; as well as mistakes to avoid when looking to reduce logistics costs. Staying on the cost topic, it is important to understand what outsourcing can do for your business and how it can affect your bottom line.
A growing trend among global organisations, particularly those re-focusing their attention on core competencies and cost efficiencies due to the economic slump, is outsourcing all, or part of, procurement and logistics processes.
This is particularly true for organisations who lack specific expertise, such as financial services providers that struggle with logistics, and manufacturing businesses, such as pharmaceutical companies who attempt to manage their own supply chains. Even though pharmaceutical companies may have experience in moving products that fall within their area of expertise, like medicine or tissue samples, other types of products which they need to keep their businesses running might require a different kind of specialised logistics knowledge. When it comes to procuring and transporting IT equipment, for example, these companies may require the assistance and services of logistics experts just as much as any other organisation.
There’s certainly an international trend towards outsourcing IT procurement and logistics, however, it’s important to understand the benefits of entrusting your entire IT supply chain to a single outsourcing partner that has expertise across the board. It’s not advisable to outsource piecemeal, thinking it will be more cost-effective. A fractured supply chain creates complexity, and complexity creates cost. This is owing to the need to manage and co-ordinate a range of suppliers, as opposed to having a single point of contact.
With one supply chain and system integration partner, you can feel secure in dealing with a single supplier that’s also responsible for:
- Delivering the product on time and within budget;
- Co-ordinating with project managers to ensure engineers are on site to install and integrate the product; and
- Ensuring the equipment is maintained and operating at optimum efficiency throughout its lifecycle.
Thanks to sophisticated control mechanisms that proactively monitor the various components of the supply chain, as well as information systems to connect and co-ordinate the supply chain seamlessly, global and international companies can enjoy complete end-to-end visibility at all times. And if something should veer off course during this entire process, there’s only one number to call.