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Need a Breakthrough? Try Business Process Outsourcing

With conventional approaches to supply chain cost cutting pretty much exhausted, what’s the next big area of opportunity? It may well be Business Process Outsourcing—a strategy of outsourcing supply chain processes in a way that increases agility and responsiveness while minimizing capital investment. In adopting this approach, the SCOR resources from the Supply Chain Council can give a major assist.

By ·

Supply chain managers historically have been under pressure to reduce costs and improve service. But today they are finding it increasingly difficult to effectively respond to this pressure within their operating and capital constraints. The main culprit: an unprecedented level of uncertainty and variability in the supply chain. Volatility in fuel cost, raw material cost, labor cost, and the global economy in general are the new realities.

As supply lines expand and contract with these volatile conditions, simply maintaining—let alone improving—operating performance is a daunting assignment. In today’s “flat world” where new competitors seem to be emerging every day, the challenges of sourcing, manufacturing, and delivering products in global markets has only intensified. And increasingly, this all must be done within the context of sustainability and the economic impact of carbon credits. Implementing an agile and responsive supply network is critical to supply chain performance and risk mitigation today. In fact, this has become essential to any company seeking to improve performance in reliability, cost, and asset management.

That’s the bad news. The worse news is that competition for capital is at an all-time high. And capital for manufacturing assets in particular is often more critical to survival than capital for operating process improvements. For this reason, supply chain managers must look to outsourcing—which has little capital expenditure and usually has a cost advantage—as a means of achieving a more agile and responsive supply network.

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By ·
Download Article PDF

Supply chain managers historically have been under pressure to reduce costs and improve service. But today they are finding it increasingly difficult to effectively respond to this pressure within their operating and capital constraints. The main culprit: an unprecedented level of uncertainty and variability in the supply chain. Volatility in fuel cost, raw material cost, labor cost, and the global economy in general are the new realities.

As supply lines expand and contract with these volatile conditions, simply maintaining—let alone improving—operating performance is a daunting assignment. In today’s “flat world” where new competitors seem to be emerging every day, the challenges of sourcing, manufacturing, and delivering products in global markets has only intensified. And increasingly, this all must be done within the context of sustainability and the economic impact of carbon credits. Implementing an agile and responsive supply network is critical to supply chain performance and risk mitigation today. In fact, this has become essential to any company seeking to improve performance in reliability, cost, and asset management.

That’s the bad news. The worse news is that competition for capital is at an all-time high. And capital for manufacturing assets in particular is often more critical to survival than capital for operating process improvements. For this reason, supply chain managers must look to outsourcing—which has little capital expenditure and usually has a cost advantage—as a means of achieving a more agile and responsive supply network.

SUBSCRIBERS: Click here to download PDF of the full article.

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From the September-October 2018
This month’s issue will help you in your job of staying ahead of the pack, following the leaders and, with luck, blazing the next trail.
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