The move to outsource supply chain services is increasing around the world despite weakened economic conditions, but contracting third-party providers
The move to outsource supply chain services is increasing around the world despite weakened economic conditions, but contracting third-party providers is not an “all or nothing proposition” according to one logistics player.
SEKO, a global provider of supply chain solutions, says outsourcing requires an in-depth evaluation of a businesses’ entire supply chain process.
“In today’s dynamic global business environment with enhanced technologies and vastly extended supply chains, companies are often confused by the many logistics options available to them,” says John Fitzgerald, Vice President of Global Sales and Marketing for SEKO.
“Before making a decision on how to best implement a supply chain management process, companies should evaluate their own cultural alignment, core competencies and business capabilities.
“A company’s cultural alignment and cross-departmental capabilities, especially as they relate to technology, will provide the seminal factors in determining whether it should keep supply chain management services in-house, outsource them to a third-party logistics provider, or employ a combination of both.”
Fitzgerald suggests six paradigms that companies should abide by when making an outsourcing decision: determine the state of your warehouse management system, evaluate production facilities, look at current delivery date success, assess overhead and fixed logistics costs, examine current technology capabilities, and evaluate in-house customs compliance readiness.
“Ultimately, following an in-depth evaluation of the entire supply chain process, many companies find that including a mix of in-house and outsourced logistics functions may provide the best solution for them,” says Fitzgerald.
“In a global economy, where there is no set criterion for supply chain success, companies have to carefully analyse their requirements and determine what logistics processes are best suited to meeting their specific and unique global distribution needs.
“Cost is always important, but ultimately the success of any global supply chain management process relates back to client satisfaction as a means of achieving customer focus and growth in market share.”