Supply Chain: BPO (Business Process Outsourcing)

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Author: Xabier Basañez, Managing Director LATAM, Alcott Global

Business process outsourcing or BPO in the supply chain is a business practice in which one organization outsources its processes through another company for its own business to operate successfully.

This COVID crisis is speeding new customer patterns, new ways for the companies to meet the customer’s needs, and new ways to execute the internal processes.

When we are talking about processes, the entire Supply Chain is involved and will be transformed.

Traditionally, organizations engage in business process outsourcing for two main areas of work: back-office functions as IT, HR, QA, and payroll, and front-office functions like customer services, sales, and supply chain processes.

Which are the Supply Chain Processes that can be outsourced? Let’s make an example list of some of them:

  • Demand and inventory planning (SCM)
  • Warehouse strategic and operational management
  • Inventory cycle counting
  • Key performance indicators (KPIs) management
  • Advanced Supply Chain Analytics
  • Dynamic routing
  • Slotting

Under today’s pressure to contain costs and produce results, you must transform rather than simply improve your operation. That means adopting the methods, technologies, and processes that will make your organization “best in class.”

Supply chain management business process outsourcing (BPO) allows organizations to contract with third parties a specific set of operational tasks and processes. It taps cloud computing and an assortment of digital tools and technologies, including analytics, to facilitate these outsourced processes.

And definitely, with the chaotic scenarios that this COVID crisis is showing us for the near future, tackling supply chain management (SCM) with outsourcing specialized is the right solution to be considered.

Analysis has to be done by the organizations, and the decisions have to be based on strategic and tangible factors, rather than only on costs. And for sure, track service levels through a KPI-based approach.

Finally, Supply chain management business process outsourcing is an increasingly valued alternative for managing business operations in the organization, and specifically in the medium-size and small companies can provide a winning path in agility and flexibility that typically lead to cost savings and revenue gains.

Source: Supply Chain: BPO (Business Process Outsourcing) by Xabier Basañez | LinkedIn

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