What would happen if you keep on ordering goods without listing and keeping track of them? That would be total chaos for your business. Companies are now finding better solutions for their procurement and logistics functions. Here’s how.
Dealing with procurement and logistics side of the business is often confusing for many business owners. It’s difficult to pinpoint where it starts or where it ends. So first, it’s important to know both of their individual functions for your company.
Procurement is the aspect of your business where you source or buy goods or services. It involves the purchasing of goods, negotiating price, and the checking of inventory. Procurement usually takes on more than half of your company’s costs.
On the other hand, logistics is where you store, transport, and deliver those purchased goods to a target destination. It ensures that the storage and movement of goods are safe and secure in order to meet customer demand.
Logistics can support procurement function and this is called procurement logistics. It is where you buy materials that are needed to manufacture goods. It also includes inventory management, quality control of the products and other services.
The importance of both procurement and logistics
As the global economy continually evolves, companies are constantly trying to keep up with market trends. With this, it has become essential to understand the importance of both procurement and logistics.
When it comes to procurement, the manager needs to handle the sourcing and utilisation of the goods. In the logistics department, the manager needs to supervise everything after buying the products.
To ensure that the delivery of goods are on time and within their budget, businesses need to plan their procurement and logistics very carefully. As these roles can be very specialized, it has become a common business practice for companies to outsource these roles to an outside provider.
Outsourcing your procurement functions
There are several reasons why many companies are starting to outsource their work. One is that procurement and logistics doesn’t directly add revenue to their business. Second, they want to make their business operations more efficient.
Other reasons that businesses regularly outsource their procurement and logistics include:
- It allows you to focus on your business strategies
- Outsourcing improves your operational efficiencies
- It gives you access to the expertise you need
- It allows you to ramp up your team quickly and cost effectively
- Increase your savings
Many tasks don’t seem to be necessarily done in-house. Still, these tasks can differ from business to business. These include data gathering, compliance tracking, accomplishing simple contracts or electronic procurement tasks. They’re not a big part of the core strategies of the business.
Outsourcing offers companies a win-win situation. A service provider can free up your time by taking away the time-consuming tasks. Investing in outsourcing and added systems also allows business owners to focus on the things that are important to their company, all while still keeping control over their whole procurement division.
This also presents an opportunity for organisations to analyse their in-house processes. They can assess whether these processes add value to their business or not at all.
The global outsourcing industry also provides companies with direct access to a huge pool of experts who can help improve the business. They can lead your company through policy compliance and other processes, and in many cases, utilizing the talents of top professionals based overseas is significantly more cost effective than exclusively hiring within the domestic market.
Altogether, outsourcing can improve business efficiencies, reduce costs, and enables you to use your in-house resources for major processes.
Will outsourcing your procurement functions be completely worth it? That could be a yes, but only once you have identified your focus areas and core strategies.
How Cloudstaff can be your trusted outsourcing partner
Cloudstaff is a global outsourcing company who can provide you with staff who are great at doing time-consuming tasks. Cloudstaff’s professional staff are highly skilled in a wide range of procurement, logistics and other support roles.
Our total commitment to innovation and technology has allowed us to create a whole new category of outsourcing solutions. We provide fully equipped workspaces, up-to-date hardware and software and other essential tools. This is to deliver seamless integration with the rest of your business.
We offer outsourcing solutions that are scalable and tailored to your specific needs. We can help you get the results you want.
Want to know more about outsourcing your procurement and logistics with us? You can send us a message at firstname.lastname@example.org.
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