When you approach the insource-outsource decision-making process, it is important to understand your own organization’s talent, processes, technology and culture. Hand-in-hand with that: know the capabilities a best-in-class service provider brings to the table.
Depending on the outsourcing approach that your business deploys, make sure your provider’s skillset aligns with your organization’s needs.
In today’s environment, supply chain practices are taking central focus. Recovery will depend on adaptive response to global pandemic, economic turmoil and a sharp shift in buying practices and delivery needs.
A lot of companies don’t have a complete understanding of what their partners should be providing. Outsourced solutions supplement your internal response to these dramatic shifts. When your partner exhibits these 4 Outsourcing Must-Haves they have the buy-in to keep you in the game.
Your partner can’t deliver? Better understand why.
Outsourcing Must-Have No. 1: Responsiveness
If you are not with a responsive partner that is able to enact change quickly within your supply chain, you are setting up yourself and your company for failure.
What does it mean to have a responsive partner? Your broker or 3PL should have a regular cadence for response. This is more than a quick, timely email follow-up when there is a problem – although that is important.
More than that, a responsive partner lends an empathetic ear to what is happening within your organization. That is fundamental to internal communications within the partner organizations, and it streamlines the ability to enact change that delivers value back to you – and your customer.
A global pandemic validated the vital importance of having a responsive partner able to deliver value in the face of your individual disruption.
Outsourcing Must-Have No. 2: Visibility
Not long ago, visibility was on the wish list. Today, it is a must-have for doing business.
Global supply chains have become so complex with the myriad of partners that exist around the world. Even if you only have a domestic North American supply chain, it is still quite complex.
Whether you outsource logistics, manufacturing or human resources, your partner should be able and willing to provide you with visibility to your data. It is valuable beyond belief.
Accessing that data – as well as meaningful analysis of it – requires technology. You should have access and visibility to what is happening down to the SKU-level, in terms of historical trends in the shipping market with parcel, LTL, truckload and warehousing costs.
If you are trying to make a decision on outsourcing part of your business, there is data that is going to help you with those decisions. If you do not have access to that data – or if you cannot get it quickly, you are with the wrong partner.
Outsourcing Must-Have No. 3: Agility
Look back at the first half of 2020. How many supply chains were turned upside down? Right or wrong, so many risks for the future have emerged.
For example, what happens if, culturally, we decide not to continue doing business with China? What if a big portion of your market does not want to buy from a company that sources from China?
With strategic alignment to your business and operational agility, your partner has the ability to anticipate market changes and provide a response plan that mitigates any emerging threats to your profitability.
Whether achieved through their own technology stack or internal alignment, your partner needs to have the flexibility to adjust as your business changes.
Look at the retail world. In the early stages of COVID-19, every retail store closed apart from the essentials. That spurred panic for organizations still trying to figure out ways to sell products. It forced the traditional retail model further toward e-commerce.
Companies that have really thought about their supply chain were able to begin using their retail footprint to fulfill from stores. Ship-from-store strategies kept inventory moving without requiring moves from distribution centers scattered throughout the country.
That helped Levi Strauss expand its e-commerce business 25 percent during its second quarter, including a 79 percent uptick in May. About one-third of that online demand was fulfilled by stores. Doing that requires a massive change. If you do not have the internal resources of Levis, you need a partner that can support you.
Outsourcing Must-Have No. 4: Expertise
Global networks are complex, Technology is changing rapidly. Your supply chain drives many moving parts across your business. A world-class partner should provide expertise in managing each of these dynamics – in addition to its core executable value.
What does that mean? You need a partner that is delivering expertise around technology, process, innovation and their experiences in other industries.
A supply chain master that manages hundreds of supply chains across diverse verticals, service models and geographies has the ability to apply strategies that deliver optimal logistics performance across a broad variety of operational environments.
That broad experience means that when there's a new technology, innovation, or process that might improve manufacturing, our supply chain leaders are looking for ways to apply best practices in retail or distribution arenas.
If you are in a monitored outsourcing model focused simply on tactical execution, expertise has limited value.
However, if you are looking for a truly strategic, orchestrated relationship with a partner, expertise keeps your company moving forward in a disruption-filled marketplace.
What Sets Your Partner Apart?
If you have a responsive partner that is agile, flexible and able to deliver visibility and a deep bench of experience – hold on to it. These are prerequisite traits for a successful service relationship.
It also helps to know some of the traits that set a logistics provider apart in the marketplace. Three capabilities really elevate the performance of your entire supply chain. We detail these qualities during “The Logistics Dilemma: Insource vs Outsource.”
Watch the webinar today. Hear real world scenarios where our clients have realized elevated value from:
- Strategic alignment
Your organization works every day to fulfill strategies focused on meeting the needs of your customers – and deliver additional value along the way. If your partner does not have alignment to and understand your strategy, how can you expect them to align and create more value for you?
Open the webinar and learn more about what sets a Supply Chain Master apart.