Best practices for supply chain management outsourcing


describe the imageIn realizing the benefits of outsourcing certain business processes, companies around the world are taking a closer look at their organizations to determine what areas are best for being taken off premise. Some are looking at the possibility of outsourcing supply chain management.

Overseeing a community of business partners is overly challenging, yet extremely necessary for companies. It's important to manage all aspects of ever-growing supply chains properly to ensure that manufacturing processes run smoothly and turnaround times for bringing products to the market are minimal.

By outsourcing the supply chain community management, companies will be free to focus on other areas of the business. To help make the decision to outsource, a recent Gartner report outlined several best practices for any agreement.

1. Align outsourcing and business strategies

When the two are brought together as one, a company can ensure that its specific needs are met and both are flexible enough to keep up with changes either may experience, according to Gartner.

2. Understand the company's capabilities in managing partners

With better knowledge of its own maturity levels, the report said, a company will be more aware of what type of partner it needs to handle outsourcing needs. Such information will become increasingly important as the company becomes more demand-driven.

3. Consider core competencies, the market participants and the points of overlap

Many suppliers of supply chain management outsourcing are expanding their offerings to overlap with other organizations in the industry. A company must understand which capabilities are central to a vendor's offerings and which are not in order to make an informed selection.

4. Look beyond cost for outsourcing decisions

It's easy to be blinded by cost considerations when choosing an outsourcing partner, but a company must take other factors into account. According to Gartner, decisions should instead be based on strategic and tangible factors, including customer service and quality control.

5. Ensure data flows freely

The most important aspect of any type of business integration, whether within an organization's walls or with an outsourcing vendor, is the free flow of data between systems. The report stated that data should be visible on both ends and shared on a regular basis.

No matter if a company outsources the task or handles it in house, experts agree that supply chain community management has never been more important. As the economy recovers, companies have to be sure their products hit the market quickly and efficiently.