Greater Scalability in Supply Chain Network
Working with a managed supply chain provider that has a large geographic or national presence can provide ready options to support your business as it makes decisions to expand, grow, or respond to market changes. Access to people, other providers, or technology to assist in growth can drastically reduce the cost involved in finding new partners or sourcing solutions internally.
Flexibility in Distribution Channels
Even prior to the COVID-19 crisis, customer demands were taking more business to the e-commerce model than ever before. However, while white glove solutions like Amazon have their benefits (convenience, marketplace, etc) they also have their drawbacks (higher costs, high compliance requirements, etc.). Having a managed partner than can execute B2B and B2C business provides your business options in getting your products to where they need to be -- in your customers' hands.
Centralization of services
Who owns supply chain management in your organization and who are they working with? Many organizations have multiple departments such as procurement, operations, and customer services all involved in the flow of product from factory to your customers front door. This is often complicated by the many relationships and preferences which exist with vendors, suppliers, and partners. Working with a solid managed supply chain provider provides a single point of accountability, customer services, and access to industry relationships. Additionally, aspects such as centralized invoicing and exception handling reduce time and energy chasing down resolution to issues that may occur.
Freeing employees for strategic work
When supply chain managers are dealing with sourcing, compliance issues, hiring/firing of resources, etc they are not able to focus on what’s most important - how to most efficiently and cost-effectively get their end customers products and collect revenue. By outsourcing some of the more lower-value work to a provider can not only improve quality through specialization, but allow key assets to make business critical decisions that more greatly affect the bottom line and/or top line profitability.
Access to Expertise and Converged Services
Just like the businesses they service, managed service providers can be very diversified in their service portfolio. They may have capabilities not only around core functions but also ancillary services may exist. For example, a provider may have been contracted to provide services around warehousing and distribution, but also has the ability to deliver on forwarding, domestic logistics/transportation, contract management, compliance management, real estate management, warehousing, invoicing, shipping, all under one umbrella.
Human capital cost stabilization and better customer service
Managed supply chain providers specialize in operations around imports, exports, warehousing, distribution, and the final mile. They understand how to have critical conversations with vendors and providers in the supply chain and can enforce SLAs through their vendor/supplier relationships. Additionally, in outsourcing this function, this means your business does not have to worry about talent acquisition, termination, or maintaining team members through volatile times and changes in the labor market.
Disaster Recovery and Business Continuity
Many businesses, especially those with a fairly limited set of options in warehousing and distribution, saw the real negative impact of COVID in having to manage, operate, and keep safe those workers deemed “essential”. Others saw operations shut down periodically all together. Having a managed supply chain service partner with a network of vendors and solutions can provide alternatives which allow businesses to react in times of crisis.
Low capital investment and predictable monthly costs
When engaging with a managed supply chain service provider, there is no need for large capital investment in real estate, technology infrastructure, compliance programs, or personnel. Part of their value is having that infrastructure established so that their customers can take advantage of economies of scale. If you have a solid understanding of your production and throughput, costs are very predictable. Some providers even allow for use of technology and software at little to no charge.
Want to learn more about outsourcing supply chain services? Read our latest blog about outsourcing warehousing and e-commerce fulfillment operations.