Business process outsourcing (BPO) traditionally involves the outsourcing of business functions to third-party providers and has its roots in supply chain management provision to major manufacturers. Although, BPO now also applies to functions that are traditionally back office departments, such as finance or human resources, it is still incredibly relevant to supply chain logistics.
Given the global nature of business in the 21st century it is extremely important that any enterprise involved in selling products can provide them in any required quantity to any worldwide location. This is not only vital to generate income, but repeated timely delivery also enhances the reputation of the company, engendering customer and client loyalty that helps improve its long term business prospects.
Manufacturers that attempt to fulfil their own supply requirements using internal resources can incur significantly large development and operational costs. As it can be extremely expensive to achieve the objective of delivering products on time to the right location by utilising this approach, many companies instead opt to buy-in their supply chain logistics management as a third party service through business process outsourcing.
By utilising such business process outsourcing an enterprise?s management team can keep their eyes on what is important to them and what they are trained for i.e. building their business and attracting sales, confident in the knowledge that the supply chain logistics are being taken care of externally. It is a growing trend throughout the world?s manufacturers, employing third party providers to implement state-of-the-art software solutions for their entire manufacturing and delivery processes. There is also a synergy involved in using a third party company that develops its software based on wide and varied experiences from a number of industries throughout the world, rather than just one manufacturer.
The benefits of implementing such supply chain logistics management systems not only include the improvement of the order to delivery process but also provide considerable cost savings. For example, sophisticated software can source materials at reduced costs, often by bidding for them at multiple locations before eventually purchasing the cheapest to the required amount, therefore ensuring that the best deals are always sought in terms of finding resources.
The third-party provider of supply chain logistics management delivers a seamless service to its client and it is that combination of cost savings and efficiency improvements that prompts manufacturers to opt for BPO, over using internal resources. Not only does it reduce the costs to both customers and suppliers, but at the same time ensures that margins and production quality are maintained, so everyone wins.
Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
Article from articlesbase.com
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