The weakening economy hasn't stopped companies from outsourcing their supply chain management activities, according to Seko Worldwide, the global provider of logistics and supply-chain services. But companies today are realizing that outsourcing to logistics service providers "is not an all-or-nothing proposition, and requires an in-depth evaluation of the entire supply chain process," the company said. John Fitzgerald, vice president of global sales and marketing with Seko, said companies need to evaluate their cultural alignment, core competencies and overall business capabilities before deciding whether and how much to outsource. There are six "paradigms" involved in the decision, he said. Companies should determine the state of their warehouse management systems, with a particular eye on the prevalence of stockouts for finished goods. They should take a close look at their production facilities, to see if they are down for long periods of time. They should evaluate delivery-date success for time-sensitive products. They should assess overhead and fixed logistics costs, to determine whether the shared facilities of an LSP would be more economical to use. They should examine their information technology capabilities. And they should evaluate their readiness to comply with new import regulations of U.S. Customs. Having conducted such an in-depth evaluation of supply chain processes, companies often find that a mix of in-house and outsourced logistics functions is the best way to go, Fitzgerald said.
