Retail, CPG and Logistics
Outsourcing in supply chain management: What CEOs and CFOs need to know
In the past decade, the retail supply chain management playbook has been rewritten to address critical situations the industry has and continues to tackle. Geopolitical tensions, global supply shortages and events like the COVID-19 pandemic have collectively highlighted the imminent need for rapid innovation. More importantly, these scenarios, though disastrous, have helped industry professionals develop a mature outlook toward supply chain resilience and the roles outsourcing companies play in cultivating it.
For many CEOs and CFOs today, outsourcing in supply chain management is critical to navigating the increasingly choppy waters of global trade.
C-suite guide: Three essential pillars of outsourcing in supply chain management
Here are the top three elements that make outsourcing in supply chain management a key consideration that directly impacts the bottom line.
Visibility and agility
Legacy frameworks lack the sophistication needed to deliver agile responses when supply chain management is under pressure. Factors like siloed data storage, poor intra-departmental communication, and manual data processing can restrict organisational growth. Moreover, the lack of real-time downstream visibility is often the reason guesswork enters the decision-making process. Without a granular view of the entire supply chain structure, organisations are exposed to severe bottlenecks and suffer an impaired rate of response to existing leakages.
How outsourcing helps
While replacing legacy systems altogether may be a long and arduous process, outsourcing can quickly equip C-suite with end-to-end network visibility. Top-tier outsourcing companies understand the pivotal role of technology and invest heavily in upgrading their own systems to improve their offerings. This allows C-suite the ability to leverage AI-powered analytics, IoT-integrated systems, and blockchain solutions without having to break their back over building internal capacities. This also helps organisations deliver agile responses without risking disruptions to everyday operations.
C-suite consideration
Apart from knowing where things are, maintaining agility relies greatly on predicting the next challenge. The solution is to analyse and identify bottlenecks before they become disruptions. This gives businesses a competitive edge and secures the bottom line.
Business continuity
If there’s one thing supply chain management experts can unanimously agree upon, it’s the fact that the list of potential disruptions that threaten business continuity is endless. From geopolitical instability, rising labour shortages, and uncontrollable natural phenomena, supply chains are exposed to several risks. Such scenarios leave internal risk management teams spread thin and lacking the ability to intervene in specific areas that may require subject matter expertise.
How outsourcing helps
Outsourcing companies help offload the pressures of risk management through interventions focused primarily on supply chain threats. They offer a wider perspective by leveraging insights gained from diverse client partnerships, allowing them the ability to recognise emerging patterns for potential risks. This includes weakened global trade links, regulatory amendments, and early warnings of supplier distress that internal teams may not be able to detect.
C-suite consideration
Outsourcing in supply chain management is focused on creating a hedge around your business to shield it from any unexpected turn of events. It offers limitless access to a wealth of resources and expertise that cushion the blow of global disruptions.
Scale and flexibility
Global markets are volatile and tend to change sporadically. As a result, businesses need resilient and flexible supply chains that can be scaled up or down depending on the increase or decrease in demand.
How outsourcing helps
Outsourcing companies possess a large network of supplier and channel partners which allows them the ability to scale up or down efficiently and swiftly. Consequently, organisations that outsource logistics and supply chain management to top-tier companies experience improved cash-flow management and stability in volatile markets. Whether it’s adding merchandise and space planning for additional inventory, sourcing, or last-mile logistics management, outsourcing fortifies businesses against operational setbacks.
C-suite consideration
Outsourcing in supply chain management is a flexible and scalable solution to capitalise on market opportunities quickly without deviating from core business activities. It makes growth accessible by eliminating the burdens of resource overutilisation and long-term financial commitments associated with developing internal capacities.
Ultimately, outsourcing in logistics and supply chain management should be approached strategically. It requires careful planning, detailed due diligence, and a strong partnership with experienced outsourcing companies. It drives growth, improves resilience, and positions your company for long-term success in a complex and rapidly changing environment.
How can Infosys BPM help with retail supply chain management?
By leveraging outsourcing in supply chain management, businesses can realise operational efficiencies, minimise dead stock, and enhance vendor relationships, directly impacting the bottom line. More importantly, outsourcing frees C-suite executives to invest their time in core business initiatives and drive growth. Retail.Nxt, a cutting solution by Infosys BPM, equips businesses to deliver a smarter, more agile, and highly responsive retail experience.
