The 4 Top Reasons You Should Outsource Your Product Sourcing Now

We’ve seen a certain boom over the last 10 years, sensible organisations of all sizes are admitting the need to outsource procurement.

So why would companies choose to outsource their procurement and their product sourcing?

The overarching reason we’d assume is that the organisation will achieve its overall strategic objectives better through outsourcing. The outsourced service will reduce costs and add direct value – “Bottom Line” benefits.

So how?

Let´s look at some of the main possibilities:

Expertise – Most companies don’t have the internal expertise or focus to source the best deal. Communicating around the globe can be daunting and very time consuming without having the network of manufacturers and factories that expert procurement companies have. ‘We have indirect spend or low priority categories that will never get the internal attention that they possibly deserve’. An outsourcer can bring that focus. What is currently a low-priority category for the client may be taken on by a highly skilled outsourced professional who can drive better value/lower costs?

Technology and Process – Even the very large organisations don’t have the budget, expertise and time to make their own investment work. An outsourcer with the transactional management, longstanding contact / supplier chains and other technologies already all set up and in place can reduce the costs and improve efficiency.

Costs – An outsourcer can run procurement cheaper than most companies could do internally. There would be very few companies, large and small, that wouldn’t benefit from savings on staff costs – particularly where there’s a large element of transactional processing where very little can be automated.

Control – If we asked an organisation to state the cost spent on sourcing a certain product, we’re unlikely to get an accurate answer. It’s very difficult to manage internal spend in a controlled and governed manner. An outsourcer will help to control internal budgets and keep spend focused on the important parts.

It is in fact a combination of the ‘Focus’ and ‘Control’ drivers that are at the top of the list. Control is a strange one – in theory there’s no reason why an organisation couldn’t drive compliance within an internal team. But in reality, no doubt it is the external contract that will force the organisation into appropriate behaviour.

Our team at Innovolo we have been sourcing products from around the globe for the last 20 years and are experts in finding products that our clients aren’t able to source, or don’t have time to.

We have developed strong bonds with factories all over the world and our staff and agents are constantly on the lookout for new products, partners and processes. This means that we are confident that we will be able to source or manufacture most products that our clients request.

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Really good points Elsa. For me, I just don’t have the time or people avialable in the team to be able to re-source our products… but it’s high on the agenda to sort!

I am no fan of outsourcing to be honest. At least as a first option. However, this is a legit strategy and has some benefits I admit. One of those is the fact that idea generation should be easier granted the team are working in the same page that is.

Being able to create ideas that can generate income is huge success. That is why innovation is the key for a company to do better.

Profits comes as a result of good physical product development to yields a last long solution product. With this post, product outsourcing shouldn’t be an issue again.

Procurement can be taxing on a company. Outsourcing it does help a lot plus it gives the company ample room for innovation.

Outsourcing procurement can do wonders for new product development. The company will have more time to innovate which is always a plus.

How does outsourcing procurement tie to product design? Is there some kind of link?

Outsourcing is the best problem solution to many challenges. It really does pay off in the end.

Outsourcing procurement to the right third party company can improve the physical product development within an organization. This is because they will have access to better quality components.

What I like most about procurement outsourcing is that it can improve idea generation. The extra time can be used to foster generation of better ideas.

In order to create ideas more effectively, a portion of a business is best outsourced. It always works wonders!

I can totally see how outsourcing of procurement can lead to new product ideas. Many thanks for the great and informative article.

With an outsourced procurement process idea commercialisation becomes a breeze. This is mainly because there is less burden on the company.

When talking about innovation in Cornwall, it is the companies that outsource procurement that thrive the most. I wonder why that is.

New product development in the UK can see a big boost if more companies adopt procurement outsourcing. Thank you for highlighting its benefits.

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