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Benefits of supply chain outsourcing

Updated: Apr 25, 2023

Since supply chains are so critical to the success and continuity of all businesses, optimizing them will result in faster production cycles and reduced costs. The key to an optimized supply chain is an effective supply chain management (SCM) and a great way to achieve such optimization is by outsourcing SCM to the right experts.

So why would one prefer outsourcing supply chains services?

In our experience of over 10 years in the industry, a few things have played out consistently. Most flourishing businesses have either invested too heavily on their technologies and are locked in with platforms such as SAP, Oracle or JD Edwards. As a business owner or leader, this can be a significant investment and happens once in a decade. Now some companies do this really well and invest in people, skills and mature processes to have an effective supply chain. I believe that is a rare gem

Quite often, businesses invest too heavily in technology whilst hoping the skills and processes will mature over time. I have also noticed the opposite, whereby, companies would invest significantly in people, skills and processes by bringing in consultants as change agents, however, they may be ineffective if the tools are not adequate and the change might only last for a short-term period as people still feel comfortable with their old-school methods.

So we feel the problem can be resolved by simply outsourcing the supply chain function to experts who are good at it whilst leveraging the best technologies in the market. Did I mention at a cost you can afford and see a return under 1 year?

Most supply chain leaders have to spend an enormous amount of money on tools, resources, skills, mature processes including external consulting fees to establish the frameworks. After all that capital expenditure, the hope is that it all works once established.

When you outsource your supply chain, you can be flexible, focus on your business, leverage value creation from efficient supply chains and do it all at a significantly lower-cost model.

The best bit is that you are not stuck with a legacy technology anymore, you are also not locked to the outsourcing model in any format as you pay daily rates.

Find out more here in an article by river systems.


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