Top 7 Benefits of Supply Chain Outsourcing

Did you know that 70% of businesses in the US outsource to reduce costs? With an industry that is worth $92.5 billion annually, both small and large successful businesses are all handing their processes to third parties. But do you know how your company can benefit?

One way is to hand the management of your supply chain to a third party. Read on as we give seven must-know benefits of supply chain outsourcing. 

1. Cost Reduction

The biggest reason, and arguably the most important benefit, is cost. A professional supply chain management company will have expertise in how to lower overall expenses. They may have solutions you had never thought about, such as staff, overheads, waste, and even cold storage. 

By streamlining logistics and making these processes more effective, you save money. Generally, this will focus on increasing the transportation of your supply chain and the management of its inventory. After this, other factors such as the ones above will be addressed accordingly. 

2. Strategic Positioning

If you run a business, then you know how much time and effort running your Supply Chain Outsourcing can take. Getting bogged down in the intricacies of it is easy to do. Before long, you end up running a supply chain instead of focusing on the core of your business. 

When you outsource, you claim this time back. This allows you to focus on the main aims of your company. That is developing a great product or service, marketing it, and converting that into leads and sales. 

3. Lower Shipping Rates

One very specific way of lowering costs through outsourcing your Supply Chain Outsourcing is with shipping rates. This can be one of the hardest parts of the job. Prices fluctuate and need constant adjustment, and price negotiations need to be made with partners. 

With outsourcing, this becomes a thing of the past. Prices will be locked in and may often be much lower than that which you are already paying. That means savings in both money and time. 

When searching for a company to do this for you, speak to them about shipping rates. Be it for road, water, or air freight, a great company will have a number of solutions. On-Site Global Logistics has a range of road, sea, and air freight solutions ready to go. 

4. Scalability

A time will come when you need to scale up or down quickly. Doing so requires a lot of organization, particularly if this scaling has come out of the blue. If you don’t put in the effort, then you miss out on sales or end up spending costs you don’t need. 

In addition, every business has its supply chain limitations. Peak season may be busier than expected or items may suddenly surge in popularity. If you can’t deliver anymore, customers will go elsewhere. 

One of the main benefits of outsourcing is that you can scale up or down easily. All it takes is a discussion with the company. As long as you tell them your current situation, they can add more or less as needed, leaving you with better inventory and providing a better customer experience.

5. Risk Mitigation

Working with partners on your supply chain will allow increased visibility. They will look at lead times, quality control, and inventory alongside you. You can use the data they provide to do an overview of the risks involved and work on mitigating them. 

All of this can give you a boost in a number of ways. You can prepare for audits, reduce lead times, optimize safety stock and reduce lead times. Not only does this mitigate risk, but it also gives you a huge competitive advantage over others in your field.