If you are a small business manufacturer, retailer, or wholesaler, you are in a never-ending race to match supply with demand. Many times it’s not feasible to handle every vital process yourself. The result often is outsourcing supply chain management (SCM).
Is that a good move or a bad one? It depends on a number of factors, but handing the entire SCM function over to a third-party service ought to be a last resort option for young companies on the move upward. Here’s why:
Is the Cost-Benefit Worth It?
Companies looking to outsource their SCM typically envision having more time to focus on marketing, development, and internal logistics. This is true, but will all the extra free-time add up to long-term revenues exceeding the price of subscribing to an external supply chain manager for the same length of time? If not, then reconsider going forward with the SCM outsourcing until a more secure plan emerges.
Is Your Business Prepared?
Outsourcing storage and distribution duties, among other things, is not an overnight process. Small businesses looking to shift the whole SCM machine off-site must be ready to do the research required to find a reliable service and hold said-service accountable for empty promises. All the while paying out hefty upfront fees. The light at the end of the tunnel is minimized costs and expanded production in place of time and money consuming in-house supply chain management. As long as a small business is prepared for a dark ride at times, all will be well.
Is it Necessary?
Let’s say it’s beyond all doubt that a small business lacks the wherewithal to handle the tasks associated with SCM. That doesn’t mean the whole system has to be thrown out the window for another company to pick up for a monthly fee. Individual solutions to specific parts of supply chain management – such as using FreightorGator to find the right carrier – are an increasingly popular alternative to fully converting SCM to an external third-party. More often than not, small businesses in need of help getting a handle on their supply chain aren’t pressed to utilize the whole host of perks a dedicated SCM offers despite paying for them. Individual services like FreightorGator provide equally excellent benefits at a fraction of the price.
Is Your Business Incapable?
Reexamining operations when deliberating over whether to outsource SCM, gearing up for the know-how necessary to negotiate with said services, and taking advantage of FreightorGator carrier quotes, among other specialized forms of help, may lead to an improved grasp on supply chain management. If so, then ask yourself whether or not SCM is beyond the capabilities of the company. New information has come to light, so why not give it one last try?
Small businesses in need of inventory to predictably and reliably flow in and out, are in a tight spot when outsourcing SCM seems to be the right choice but immediate funds are limited to get the process started. At FreightorGator, we recommend a self-audit of the current in-house system before you make a final decision. Picking and choosing services to assist in supply chain management rather than outsourcing the system outright can be the solution that frees up precious time and improves logistics without the high cost of dedicated third-party SCM.