Gartner outlines eight best practices in supply chain outsourcing

Commenting on the background, Michael Dominy, research director at Gartner, says: "Supply chain executives are starting to apply more comprehensive analysis to outsourcing decisions, such as factoring in agility, responsiveness and cost." For him, the next step involves companies focusing on what they do best and outsourcing activities that supply chain partners can do better. Hence the development of Gartner's best practices, which Dominy believes should be used when outsourcing any or all of logistics, manufacturing or supply chain management. Best practice number one is to "align the outsourcing strategy with the corporate and supply chain strategy" – a grand way of suggesting that companies need to understand their requirements and the fit of potential partners before signing on the dotted line. Number two is about understanding your current capabilities in managing supply chain outsourcing partners – the point being that manufacturers need to consider organisation, governance and future strategy when making these decisions. Number three is similar, but more about playing to your strengths, "The major players in the supply chain outsourcing market are expanding their services into each other's turf," explains Dominy. "Knowing what services are core and which ones are not for each service provider is an important factor to consider." From then on, Gartner's be3st practices include: not buying services only on cost considerations; understanding risks around IP theft; establishing proper data and information flows; defining and tracking service levels; and making use of your new found partners' processes, technologies and capabilities where it makes sense. Key issues in supply chain management are to be discussed at the Gartner Supply Chain Executive Conference 2011, 14—15 September, London.