Are you interested in outsourcing? Are you considering outsourcing your activities to an external provider? – in this article you will learn about the most common problems associated with outsourcing and how to counteract them.
What is outsourcing?
Outsourcing is an undertaking to hand over some tasks, functions or business processes to external companies or specialists instead of performing them in-house. In such a way that you focus entirely on your core business and outsource other minor activities to companies that specialise in specific activities.
For example, we produce cosmetics, but also send samples to customers, conduct market research, major advertising campaigns and many other activities related to our business. In this case, by using outsourcing, we can outsource activities such as product packaging, advertising campaign or market research so that we can not only save money, but also benefit from the services of people qualified in these areas.
Examples of outsourcing can include the outsourcing of all sorts of services such as IT services, customer service, accounting, production and even human resource management functions. Companies that choose to outsource enter into contracts with external service providers, specifying the scope of work, contract terms and other relevant details.
We choose to outsource for a variety of reasons, such as cost savings, reducing the number of tasks to be performed internally within our company, or delegating tasks to industry professionals who have broader knowledge and skills. Outsourcing has its advantages, such as reducing operational costs, increasing efficiency, accessing expertise and allowing organisations to focus on their core business areas. However, it can also involve some risks, and we will outline four of the most common such problems below.
The four most common outsourcing problems and their solutions
PRICE – plays a key role in any business and is its most decisive aspect. We can combat the high price of outsourcing services in several ways:
- Permanent cooperation can be mutually beneficial, thanks to which we will be able to obtain interesting discounts.
- Signing Long-Term Contracts can limit price flexibility, which is helpful in the event of changing market conditions.
- The Eastern market will help us to reduce costs, especially as it is well known that prices vary from region to region. When working with suppliers from the eastern market, it is necessary to have a thorough understanding of the conditions of this market, the volatility of currencies, as well as possible transport and customs costs.
- Finding an experienced business partner will guarantee us value for money in terms of services and a less risky investment.
QUALITY – when we outsource tasks to an external company, we expect them to be carried out in accordance with the current standards in our business. Outsourcing involves the risk of entrusting tasks to inadequate companies, so that their quality will not be acceptable to us. What we can do is, first of all, to examine the quality of the performance of an external company by:
- Quality control audits are key to monitoring and ensuring compliance with established standards.
- Quality certifications, such as ISO, can demonstrate a supplier’s commitment to maintaining high standards of their services.
- Checking whether the company is using modern tools and technology, which may affect their efficiency and the quality of service delivery.
- By visiting the supplier before we start working together, we can assess the production conditions, get to know the team and check that the facilities meet our expectations.
CAPACITIES IN PEAK PERIOD – how the company we entrust some of our tasks to perform in peak periods – when orders are in abundance – is of vital importance to us. There may be a situation where our order is not completed on time or is of a quality that is not acceptable to us. How then to deal with this problem:
- Booking orders ahead of time is crucial, but it is also necessary to find out whether the company can react flexibly to sudden increases in orders.
- Checking whether an external company uses temporary workers in peak periods; this can significantly affect the stability of the outsourced service.
TRANSPORTS AND STORAGE – we cannot afford a situation where entrusting someone from outside with our tasks will disrupt our supply chain. It may be the case that this company uses warehouses still owned by other companies or ones that are completely unsuitable for our products. The best solution before starting to work together is:
- Checking what warehouses a supplier has allows you to assess its capacity to store and manage stock.
- Analysis of whether the company is able to organise transport on time and at an acceptable price. The supplier’s capacity to manage transport in the area should be assessed.
Summary
Outsourcing is undoubtedly gaining in popularity and for good reason. Not only because we can get rid of the excess tasks that overburden our work, but also because we can entrust them to specialists in the field.
At Purells Innovative / Burgopak Poland, we provide services from outsourcing packaging services. Get in touch with us–we design and produce sample packaging for companies in Poland and worldwide.
Sources:
Chojnacka Agnieszka, Outsourcing logistics services – advantages and disadvantages
https://rynekinwestycji.pl/konfekcjonowanie-a-co-packing-czym-roznia-sie-te-uslugi/
https://packfully.pl/outsourcing-pakowania-produktow-dlaczego-warto-zdecydowac-sie-na-fulfilment/
