Keeping supplies coming into your startup business is crucial for its operations to continue. But with the challenges brought about by things like COVID-19, overseeing everything on your own can be a major challenge.
Luckily, outsourcing has become a promising option, as it offers businesses a way to keep their supply chains going. But it does require a considerable amount of preparation before you can embark on it. Here is how you can effectively get third-party companies to manage your supply needs.
How Outsourcing Works In Supply Chain Management
Unlike other outsourcing endeavors, supply chain management can be a bit more complex. This stems from the fact that the work itself is complex. For one, you will have several entry points from where supplies come in. Each of these points might require a different approach depending on their nature of operations.
However, you can roughly divide the different supply chain tasks into two broad categories.
- Vertical process: These are the processes that directly add value to a product. They include such tasks as manufacturing, sourcing, and logistics management.
- Horizontal process: These processes or tools help improve the vertical processes, ensuring that you do these efficiently.
Despite the distinction, vertical and horizontal supply chain processes are intertwined. The vertical processes are often company-specific, depending not just on the products, but also on how you actually deliver those.
Horizontal processes can also vary, depending on the verticals that they support. They can be strategic, covering things like planning, organization, and optimizing your supply chain. These can cover several different verticals at the same time. Meanwhile, the tactical horizontal processes are the specific tasks that keep a particular supply chain running. They are also the ones most often outsourced to a third party.
Because of this complex nature, your whole supply chain system might be vastly different from other companies. As such, you need to have an outsourcing provider who can cater specifically to you.
Why You Would Want to Outsource Your Startup Business Supply Chain
Aside from the general benefits that you can gain from any outsourcing effort, there are also specific ones for supply chain management. When harnessed the right way, these benefits can help your supply chain be more efficient and improve overall business operations.
Strategic Positioning
Outsourcing your supply chain processes will help you streamline your business operations significantly. In turn, you can focus more on the business\’s core tasks. From there, you can better position the company to attract more customers.
Greater Value
External supply chain providers give you access to solutions and expertise that might take you years to build on your own. This higher value will help accelerate product development and boost company performance. They can also give you a greater ability to meet customer demands.
Flexibility
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With the startup business scene being a dynamic one, your company must be ready to adapt to those. Your supply chain, in particular, should be quick to adapt to these changes to avoid disruption. With outsourcing, you can quickly scale it up or down depending on the changes in your industry.
Outlining Your Startup Business Approach To Supply Chain Outsourcing
The first thing to do for your supply chain outsourcing strategy is to identify the vertical and horizontal processes. Go through each product supply chain to identify the verticals that cover multiple product chains. Meanwhile, you also need to determine every horizontal task that is relevant to a particular product chain.
Once you have determined all the supply processes, arrange them into a matrix similar to the one below. This matrix displays the vertical tasks from left to right. Meanwhile, you have the horizontal tasks from top to bottom. Divide the latter into your strategic and tactical horizontals as well.
When you have made the matrix of processes, mark which of these tasks are your startup company\’s core competencies. Work with each team handling a specific supply line to determine which of their set of tasks can be sent to third-party providers. Mark these accordingly on the matrix. Once you have completed everything, you get a picture of how your supply outsourcing strategy will be.
Getting Supply Chain Providers for your Startup Business
One of the challenges with supply chain outsourcing is that you might need to work with multiple partners. Since the supply chain for each product you outsource is different, you need a specialist for each. For instance, you might need a specific provider for transportation services alongside the main procurement team.
Thus, choose providers that would be able to complement each other. For instance, getting ones that are located close to each other will help you shorten your supply time. You would also want to make sure that they have compatible procedures to avoid any issues.
Working Collaboratively With Your Outsourced Supply Partners
With several partners operating with you, you need to ensure that everything works out accordingly for your startup business. With that, you should nurture a more collaborative environment. The key to this is to combine your internal processes effectively with theirs.
Work with your partners to see which of your processes are working and which ones need refining. Do not try to force your internal processes on them. Instead, give them more room so they have greater freedom to make changes as they see fit.
To better implement this, ask for some proposals from providers. Talk about the pain points that your business encounters in the supply area. Through their expertise, they can determine how to best structure the assigned supply processes for greater efficiency. Consolidate all these proposals from the different providers into a single strategy to ensure consistency across different chains.
Keep Your Supplies Flowing Through Outsourcing
The most crucial aspect of supply chain management outsourcing is a central team that can help your startup business oversee everything. We can provide you with that team through our virtual assistant service. Our agents are highly trained in record keeping and information management, ensuring that you know what’s happening in each supply chain. Contact us today.