SupplyChain Magazine August 2020 | Page 38

PROCUREMENT

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Source : McKinsey

After an organisation has created a shortlist of potential categories for outsourcing , it should decide whether it is neccessary . In order to decide , organisations must know exactly how outsourcing can deliver value in a certain category and pick the right provider and deal to harness that value . According to McKinsey , the value levers available to strategic buyers - whether in-house or outsourced - fall into four core categories :

By bundling demands from multiple clients , outsourcing providers can often negotiate better prices , particularly in areas where the company ’ s own spend is too small or infrequent to give it a strong position in the market . To capture the benefits of volume aggregation , however , companies must ensure their own specifications and delivery requirements are sufficiently similar to those of the outsourcing provider ’ s other clients and that they are willing to accept the provider ’ s sourcing decisions , such as transitioning to lower cost suppliers .

Their scale allows outsourcing providers to offer deep expertise and

AUGUST 2020