Outsourcing and Supply Chain Management

Outsourcing and Supply Chain Management
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School Name
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Supply Chain Management
Main Discussion
Outsourcing supply chain management refers to outsourcing the entire supply chain management activity to an external business organization that specializes in supply chain management. Outsourcing the supply management helps a business lower the overall costs and allows a company to concentrate on its core competencies(Tian & Guo, 2019). It also helps the business to meet its customers' demands more effectively.
Supply chain management may affect the performance of an organization if the contracted external organization does not have experience in the industry. Hence the quality of the products may diminish (Tian &Guo, 2019). This might happen if the organization uses low-quality materials and fails to assess the risks involved fully. This can significantly damage the company; sales might go down, the brand might drown as competitors get ahead (Williamson, 2008). An excellent example of a company that was affected by outsourcing its supply chain management is an online retail business, Zappos. When it started, it used to outsource shipping and fulfillment. But the company realized that they made a huge mistake in their exceptional customer service when the organization they outsourced did not upload the same quality that Zappos had been uploading. The company then decided that they would in-source the entire supply chain management to meet their customer's expectations regarding the exceptional quality they have been providing.
A Company's management can use the metrics to avoid problems with outsourcing by making sure that everyone in the supply chain participates fully. This is beneficial as it will ensure that everyone in the ...