Many companies struggle with this thought when the market conditions change – do we outsource or keep it in-house? This article focuses on why outsourcing may be the way when the going gets tough.
In any operations, we always focus on the three imperatives – People, Process and Technology.
In order for any operations to work efficiently, all three imperatives have to work in tandem. We can have the best technology money can buy and processes that have been optimized, but if the people are not disciplined or trained, the outcome is anything but.
And when we spread our resources too thin, the result will be sub-optimal. Therefore, companies look to outsourcing to gain competitive and comparative advantage. Some functions are good candidates for outsourcing while others are important to be kept in-house. There are experts out there that you can bring in to enhance your operations without diluting your core competence.
So, do you outsource or do you keep it in-house?
Focus on Core Business
In the post pandemic world, it is more important to be focused on your Core Business. For many freight forwarders, Customs Brokerage may not be your core business – freight forwarding is. When you outsource your Customs Brokerage, you can pay attention to the day-to-day operations focusing on freight execution, strategic planning and logistics management. In the process, you will free up time for employees to focus on more value-added services and that will help improve your business.
Gain Access to Technology
Outsourcing helps one gain access to technology which could otherwise be costly. In today’s world, data management is important. It provides supply chain visibility, improves efficiency and helps companies grow. But many 3PLs do not make data management a priority. Part of the reason is cost and some other parts relate to the access to technology. Many companies like Sanbo empower businesses with digitization and digitalization applications that converts paperwork to digital form and pushed the resulting data to various application systems. The result is improved data management, efficiency and reduction in manpower required for daily processes.
Drive Efficiency and Cost Saving
By outsourcing part of your logistics operations to a partner you will be able to transform some direct costs linked to the logistic activity into variable costs. With our logistics solutions the customer who outsources its logistics won’t have to invest in systems and technologies but at the same time, can reap the benefits of digitization and digitalization.
Sanbo works with business partners to digitize and digitalize the Supply Chain processes. Data entry for one set of Customs Declaration takes anything between 25-30 minutes but with Sanbo’s Intelligent OCR solution, data extraction and TradeNet population takes all of 2 minutes – with 99% accuracy over time. But what is even more critical is the fact that the data used for Customs Declaration can also be used in the Freight Management System to generate the AWB or B/L. On the import side, the data may be pushed to a Warehouse Management System for receiving purposes. By sharing data from source and reusing the date in different application systems, there is an efficiency and productivity gain on top of improving timeliness and accuracy.
Performance Improvement
By outsourcing part of your logistics operations to a specialised partner you will be able to transform your overall responsiveness and customer satisfaction. A partner is a Subject Matter Expert (SME) that you can leverage on. With the support of technology and measurement of key performance indicators the results point towards overall performance improvement. A partner also brings expertise to areas you might not previously have access to e.g. new technologies.
Isn’t it about time you explore what’s available out there? Please get in touch with us at Sanbo Intelligent Technology to explore how outsourcing your non-core activities might help you now and in the long run.