Tools & Tips

Outsourcing from a supply chain perspective? 9 Tips to consider

Here are 9 simplified tips for outsourcing from a supply chain perspective:

1. Know your goals: Clearly define what you want to achieve through outsourcing, such as saving money, improving efficiency, or accessing specialized skills.

2. Choose the right partner: Pick a reliable and experienced outsourcing company that aligns with your needs and values. This is extremely important as you will be placing a part of your business in the hands of a third party. When suppliers make the case that “It’s not your core business”, remember that it’s their Core Business and they will know how to exploit the situation.

3. Communicate clearly: Make sure both parties understand what is expected, including timelines, quality standards, and how you’ll communicate.

4. Have a good contract: Create a detailed agreement that covers the work scope, pricing, deadlines, and how to handle any problems.

5. Keep an open line of communication: Regularly talk with your outsourcing partner, share information, and address any concerns or issues promptly.

6. Monitor performance: Keep track of how well the outsourcing partner is doing, using agreed-upon targets and metrics.

7. Be prepared for risks: Identify potential risks and have backup plans in case something goes wrong or there are data security concerns.

8. Build a good relationship: Work together with your outsourcing partner, share knowledge, solve problems as a team, and look for ways to improve.

9. Keep evaluating and adapting: Regularly review the outsourcing arrangement to make sure it still fits your goals and consider making changes if needed.

Start with the end in mind. As much as the goal is for the outsourcing deal to succeed, think about how your organisation would recover if the deal fall apart.

Want to learn more? Attend our Supply Chain Fundamentals – Integrating Supply Chains (2 Days), Achieving Operational Excellence in the Supply Chain (2 Days), Fundamentals of Supply Chain Management (2 Days) and Introduction to Supplier Relationship Management (2 Days) courses.