Outlier / Event Management – Focus on Outsourcing

While “outlier” is normally thought of as a statistical term, it perfectly represents an element of the supply chain that could be (1) physically separate from other elements of the supply chain; (2) culturally different from the rest of the supply chain. “Culturally” might include: language or work methods. Running an outlier tends to cause difficulties to the Supply Chain Management. Let’s look at outsourcing as a solution.

But why would we want to outsource something that our vast organization must have the resources to manage? Yes, being in SCM, we understand outsourcing; but sometimes many of the often-quoted reasons to outsource do not apply. Our outlier is already an efficient manufacturer with no cost issues. It all boils down to managing the PROCESS. That means bringing together the ordering, shipping and payment systems.

Let’s break out of theory and look at what could be a real example. We are located in Indiana where driverless cars are made. There are many excellent local suppliers, already used to automotive standards and processes. But we need a special part (currently non-automotive) and find the best supplier to be in Montréal. Yes, we can fly a team up there and force the company to adopt all our standards. We can make sure our staff can work closely to support them. But wouldn’t it be more resource-effective to find a third-party that is experienced in similar situations and let them manage the process for us?