Should you outsource elements of our supply chain management? This question comes up frequently in electronics and bioproduction companies. As the industry progresses with increasingly stringent quality standards, expanding global markets, and increased competition, leveraging the value of an efficient and effective supply chain is more critical than ever. Here are some potential opportunities to add value to your company through outsourcing: :
Focus on strategic tasks: With a slew of tactical and strategic details regarding a supply chain, it’s easy to get lost in translation and into the weeds. However, outsourcing your supply chain can allow you to be more focused on the bigger picture of your business and growth opportunities.
Ensuring security in supply: Outsourcing your supply chain could enhance your overall supply chain visibility, control, and security including areas such as inventory levels, lead times, quality, and compliance from start to finish. Whether it’s reducing lead times , optimizing safety stock, identifying second sources, or preparing for an audit, working with a supply chain partner helps mitigate risk.
Managing and reducing costs: Capital and operating expense associated with staffing, inventory, overhead, cGMP warehouse space, cold storage, sampling, etc. can all quickly add up when not managed properly or when in excess. Large expenses such as additional cGMP raw material storage space may be avoidable with or significantly reduced by working with an appropriate supply chain partner.
Meeting customer demand: Customer demand and overall satisfaction are the keys to the successful growth of any business. Consistently meeting production schedules with fluctuating demand requires proper raw material planning. And it is certainly critically important to mitigate the risk of shutdowns that can result in serious damage to profitability and downstream processes and relationships.
Increasing supply chain capabilities: The resources and tools available within your organization may be limited. External partners can bring additional supply chain expertise, solutions, and capabilities well beyond the scope of your current operations. As mentioned on a previous post, many supply chain companies utilize operational excellence tools such as Lean or Practical Process improvement (PPI) to help increase productivity and efficiency.
Allowing scalability: Outsourcing can often provide a cost effective way to add additional capacity and flexibility in your supply chain. In addition to providing temporary solutions during periods of capacity constraints, an external partner can assist with more structural challenges such as guidance on forecasting, space utilization, inventory strategies, and integrated supply solutions that can help you scale more effectively.