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The emergence of "as a service" platforms and providers adds more complexity to the supply chain outsourcing discussion. It is no longer just about logistics outsourcing. Now manufacturing, planning, warehousing and more can be obtained as a service. Organizations must decide what components they will outsource and what they will provide in-house.

Supply chain leaders often outsource for the wrong reasons, as a result of not following a sound outsourcing strategy. In order to be future-ready, organizations should develop an outsourcing strategy for their supply chains that establishes a balance between the importance of cost, service delivery, risk mitigation and longevity of relationship. This will allow a build/retain discussion resulting in better outcomes.

"Serve or be served. Whether you embrace emerging platforms or not, they will disrupt." – Rob Barrett, Principal, KPMG Procurement & Operations Advisory

The supply chain of the future will successfully evaluate external platforms and 5PL providers to understand which components of their network they may outsource, or offer as service, and the level of effort required to manage it. They will develop the talent that provides the skills required to manage their external partners and evaluate having a cloud-based information capability, which will allow all external parties operating on their behalf to provide real-time data.

Many organizations seek a partnership/collaborative approach with outsource providers, but few actually demonstrate the collaborative rather than transactional behaviors to achieve it. With outsourcing, an organization’s performance is much more dependent on how it manages external relationships, and the winners in supply chain will be the ones that have a response for these disruptors:

  • Everything "as a service" - Understand the environment is changing with the emergence of cloud empowered supply chain "as a service."
  • Where are my boundaries? - How much information and visibility will I provide with competitors in an increasingly collaborative environment?
  • Changing business model - How much of our operations will we outsource to another provider, and how much will we provide "as a service?" Are we a manufacturer or a service provider?
  • Component operations - Ensure strategic roadmaps take into consideration changing business models to enable decisions on how scalable you should be.

The end goal? Be an organization characterized by an outside in operating model empowered by "as a service" platforms, which is driven by business, customer, and employee insights and powered by technology and talent.

An agenda for the future of supply chain

The biggest limitation for supply chains is no longer technologies and what they can do, but rather the imagination of the people who leverage them. As enterprises around the world are facing a perfect storm of change, today’s supply chain leaders must transform business models, organizational structures and operations to thrive today and in the future.