Strategically Speaking: Should You Be Outsourcing Your Distribution?
The traditional view of outsourcing held by many organizations is much like the industry’s longtime “holy grail”—the hunt for the lowest unit manufacturing cost—i.e., the only justification for outsourcing is if it significantly reduces the publisher’s operating costs.
The recession has changed all this and requires that publishers take a broader view of the opportunities and risks in the current economic environment and the limits on resources, particularly: cash (a constraint faced by even the largest publishers); the growing importance of emerging technologies such as e-book delivery and POD; and the pressure to improve service levels as the time-in-process for orders decreases steadily. A more informed, longer-term evaluation of the rewards and risks of distribution outsourcing is essential and should be a required element of the strategic planning process.