As a fundamental building block in all businesses, supply chains have been undergoing dramatic changes over the past few decades as a result of globalization and advances in technology. Effective supply chain management has increased in importance for this reason and is crucial to business success whatever the industry.

Supply chains have now become a complex and integrated system of processes and resources for:

  • Sourcing

  • Producing

  • Delivering

  • Satisfying customer expectations

They can be expensive to manage in-house and often companies are better off outsourcing these responsibilities.

For most organizations outsourcing their supply chains is fast becoming a necessity. Not only do these companies have to deal with ever-evolving business models but also numerous constraints such as stringent government regulations, limited financial resources, and changing consumer preferences.

This alone may be enough for an organization to explore strategies that can provide access to flexible solutions that help them offer the best products and services to their customers.

Businesses today need a mechanism that can help them thrive under all these pressures and improve operational efficiency. One such approach is outsourcing your supply chain.

Outsourcing supply chains can help businesses: 

  • Reduce operating costs

  • Improve resource allocation

  • Increase efficiency of supply system management

  • Simplify logistics operations across the supply chain network

  • And more ...

It is an extremely common practice for businesses today to outsource one or more aspects of their supply chain.

A solution that has been growing rapidly over recent years is for businesses to opt for Total Supply Chain Outsourcing (TSCO) which encompasses many different supply chain-related services within one package. For businesses who want to quickly improve their supply chain management, this can be a great beneficial option. By combining all aspects of the supply chain into an outsourced solution, a business can save time and money, as well as ensure seamless communication between internal departments and external partners.

The global supply chain management market is on track to grow at a CAGR of 11.2% from 2020 to 2027 with the market reaching $37.41 billion in 2020 according to Businesswire.

It's not surprising then that the outsourcing of supply chain functions has gained so much traction in recent times. Companies worldwide are constantly looking at new and improved ways of reducing costs and speeding up their time to market while scaling up/down as needed with procurement capabilities.

But is it right for your organization?

Whether you are considering outsourcing just one aspect, or your entire supply chain management, here are six reasons why supply chain outsourcing is the right move for your business.

Reduces Costs

Outsourcing supply chains can help you optimize costs by streamlining processes. This means that you will have fewer employees on staff and spend less on in-house services. By improving an inefficient supply chain, companies can reduce their overhead expenses, producing significant cost savings while still maintaining product quality levels or even increasing them.

Efficient Logistics Management

When it comes to managing suppliers, distributors, and customers across long distances; supply chain management becomes more difficult with each added mile of distance. As such, logistics management has become a major challenge for supply chain managers. Outsourcing supply chains can be a cost-effective way to manage logistics and improve supplier relationships, all while ensuring that your customers are satisfied with the products they receive from you.


Outsourcing reduces problems associated with each individual aspect of the supply chain. Specialist companies who are more knowledgeable about your market and better equipped to handle manufacturing/assembly, inventory and distribution will work together with you to provide a unified view of the supply chain, allowing you to better fulfill orders while mitigating risk.

Outsourcing can also serve to reduce the financial risks of large capital equipment investments, extra manufacturing space, transportation, and of course labor.

Increases Production Capacity and Efficiency 

Supply chain outsourcing can help you reduce lead times by replacing in-house production with external suppliers or contract manufacturers. This will allow you to focus on your core competencies in order to compete more effectively and achieve faster production cycles. This in turn results in improved levels of customer service and assists in ensuring you can consistently meet customer demands.

Increases Global Reach and Access to New Markets 

In the global environment, reacting to a changing economy and tightening competition from business rivals of a similar product line is difficult without proper planning. Outsourcing provides an opportunity for such companies to have a stronger position by expanding their operations globally. This can provide them with access to new markets utilizing supply chain expertise in other countries or regions of the world while maintaining a streamlined and efficient supply chain.

Mitigates Environmental Impacts

Outsourcing can also help companies meet sustainability goals within the supply chain. By implementing supply chain strategies that cut down on the use of fossil fuels and increase energy efficiency, companies can reduce their environmental footprint and create a more sustainable supply chain from development and contract manufacturing right through to product distribution.

Applied Engineering