The Inevitability of Supply Chain As A Service
Updated: Jun 23, 2020
Looking forward companies will not have the expertise, resources, and/or funding to try to leverage all available technologies related to the management of their complex supply chains. As a result, only the largest companies may want to keep this work internal.
There are many advantages to moving toward a partly digital but almost wholly outsourced supply chain. These include end to end global electronic connectivity, improved productivity, lower cost, greater service, heightened flexibility and adaptability, and better asset management.
Most companies will be forced, either due to financial, resource, timing or competitive reasons to outsource more of their Supply Chain activities. However, supply chains operated by traditional third party logistics providers are inherently inflexible, costly and painfully slow to react to market changes and cost pressures.
Supply Chain services companies have the opportunity to become more vertically integrated in their service offerings. This means that supply chain as a service(SCAAS) and especially(4pl service providers) who can vertically integrate are ideally positioned in the current to near future market conditions.
Companies that need to outsource every aspect of their Supply Chain management to numerous third party organizations almost always find that the management of all of those suppliers will become their biggest challenge.
This will also reinforce the need for nearly all companies to have Control Tower/Command Centre capabilities. It is best to outsource this activity and have this 4pl service provider maintain a Control Tower platform, and buy that service. This already existing but constantly improving technology makes it much easier to manage a variety of suppliers regardless of the services that they all provide.