Situation: In an article written for Logipi, Debbie McGowan advised, before we consider the implications for outsourcing in a recession we need to consider why we do it at all. The catalyst which creates the desire to outsource varies but generally it is always because of a business issue which needs solving.
The Details: In a recession why would you consider outsourcing, Debbie wrote, well I would argue because all the reasons we outsource in the good times are amplified. In difficult times we are working harder on our core competencies we have greater business issues to deal with, our volumes may be down our workforce unstable or subject to headcount reduction, our cash flow impacted and our financial model at risk. Equally because of our market sector we may be experiencing significant growth in the recession and our business model cannot cope with the challenge in-house any longer.
What it Means: Every coin has two sides for every reason to outsource there is a potential reason not to outsource. As a poacher turned gamekeeper I would outsource 9 times out of 10. Generally I would challenge those who claim outsourcing is not effective, in my experience it is about how effectively the third party provider is negotiated with and subsequently managed. How to negotiate with and manage third party relationships is another subject and a huge opportunity. Recession or not, the approach should be to clearly identify the motivation to outsource and the expectations before you do anything. It is easy to focus on trucks and sheds but outsourcing to a third party logistics provider can be so much more. Click Here to Read Full Article...
