Strategically Speaking: Should You Be Outsourcing Your Distribution?
There are several fundamental questions that every organization should consider as part of the annual business-planning process. Forthright answers to these questions will help your leadership team decide if outsourced distribution is something your organization should seriously consider:
1. If we define “distribution” as being composed of the sales, marketing, revenue/order in-take, fulfillment, returns processing, credit and collections, customer service and inventory management (including remaindering and inventory disposal), which of these functions, if any, are your organization’s “core competencies.” In the context of an outsourcing evaluation, we define “core competencies” as those functions that your organization does supremely well and that provide a significant cost and/or competitive advantage. If you cannot credibly link your revenues or demonstrable cost advantages to the quality of the individual services you provide, the process may be a candidate for outsourcing.