While your business can build and scale your supply chain in-house, many companies partner with a third-party supply chain management expert. Outsourcing supply chain management makes shipping, logistics and distribution more efficient, so your team can focus on core business processes and scaling your company.
Reasons to Consider Outsourcing Supply Chain Management
The organization and efficiency of your supply chain are crucial for your company’s profitability and reputation. While a properly managed supply chain can keep your business processes on schedule and efficient, a poorly managed supply chain can cause inventory discrepancies, operational inefficiencies and other issues that lead to lost revenue. By outsourcing your supply chain, you can trust a professional to manage logistics and fulfillment, so your team can focus on critical business goals.
Advantages of Supply Chain Outsourcing
The following are the main benefits of outsourcing in supply chain management:
1. Increase Value
Third-party logistics and warehousing companies specialize in supply chain management — it’s their core focus. As a result, they are more knowledgeable about supply chain processes and have more experience in optimizing them. Capitalizing on their skills and expertise and leveraging their capabilities offers your business increased value faster than it would if you had to acquire these skills yourself.
2. Gain Flexibility
Purchasing or leasing warehouses and transportation equipment on your own requires a large capital investment upfront, regardless of your inventory or how much you use these resources. These fixed assets may go unused during the off-season. Supply chain outsourcing partners are better equipped with these fixed assets, so they can adapt to your seasonal demands, offering you more flexibility without the large capital investment.
3. Focus on Essential Business Operations
Supply chain management companies have extensive experience in logistics and fulfillment. Your company can rely on this expertise and trust that your third-party partner will expertly manage your supply chain. Your company will have more resources and personnel to focus on the day-to-day business operations.
4. Improve Your Competitive Advantage
With your third-party supply chain partner managing your logistics, your team can focus on leveling up your competition. Instead of focusing on logistics details, you can direct your resources toward marketing, sales, product development and other core competencies.
Besides resource management, supply chain partners with multiple national or international locations allow you to reach more customers and decrease shipping time, putting your company in a strategic position to be an industry leader.
5. Access More Working Resources
Your third-party logistics partner can increase the resources at your disposal. You can work with more staff, better equipment, increased warehousing and more. Some supply chain experts offer specialized solutions like IT infrastructure management or warehousing software systems.
6. Improve Customer Satisfaction
An efficient, optimized supply chain directly increases customer satisfaction. A third-party partner can help you analyze sales trends, respond to customer needs and manage inventory levels. These functions keep your supply chain efficient and profitable and encourage customers to continue doing business with you. Other ways a third-party logistics partner can improve customer satisfaction include:
- Making deliveries faster.
- Reducing lost sales and returns by enhancing order accuracy.
- Meeting customer demands better.
7. Control Operational Costs
Outsourcing your supply chain gives you more control over your logistics expenses, so you can reduce your costs. Working with a supply chain partner is more cost-effective than taking on in-house staffing, overhead and infrastructure expenses. Many service contracts allow you to choose the level of service you need and scale as your company grows.
Drawbacks of Outsourcing Distribution
Supply chain management outsourcing has several clear advantages, but partnering with a company that does not align with your goals may lead to drawbacks, such as:
- Technology integration issues: Supply chain management experts need to have the technology and expertise that your industry needs to keep logistics and customer experience seamless. If your third-party partner cannot integrate with your technology, it can create supply chain inefficiencies.
- Poor product quality: If your supply chain management partner doesn’t understand your products and services, shipping timelines, accuracy and inventory management can decrease, affecting the quality of the product your customer receives.
- Unexpected costs: Choose a supply chain outsourcing company that is upfront and transparent about its cost structure. Understanding the fees involved can help prevent costly expenses you’re unprepared for later.
Business Processes That Benefit From Supply Chain Management Outsourcing
Outsourcing supply chain management can benefit these supply chain processes:
- Automated shipping
- Warehouse receiving
- Order fulfillment
- Inventory management
- Product storage and shipping
- Returns management
- Order management
Why Choose EMO Trans as Your Supply Chain Outsourcing Company?
EMO Trans is a single-source logistics company that has been an outsourced supply chain partner since 1965. With 250 offices in 120 countries, we have a global presence and international expertise in logistics. Our supply chain services deliver custom logistics solutions based on your unique needs and business goals. With our expertise, you can reduce your shipping cycles, improve the value and performance of your supply chain and reduce your total logistics cost.
Request a Quote for Supply Chain Outsourcing Today
EMO Trans is a single-source logistics company that provides the services your company needs to enhance your supply chain. Learn more about how we can tailor our solutions to your company’s industry and logistics requirements — call our team at 1-516-867-6800 or request a quote to get started.