Dupré Logistics


Managing Outsourcing Relationships

Wednesday, January 11, 2012

We discussed in our last blog how outsourcing functions that others can do more effectively than you can do in-house increases your productivity, thereby increasing your profits. However, like all things, this depends on working these relationships effectively. Nothing is all pro, with no cons.

The primary downside of outsourcing is that you lose some control on the function being outsourced. The people doing the work are not your employees. The management of the company or person you have outsourced to controls what and how the work is done. Your interest is in assuring that the final product delivered to you meets your requirements and your standards.

In order for this to happen, you need to work with the outsource provider by explaining very precisely what results you are expecting to achieve. The costs, quality, timing and anything else of importance must be agreed to by both parties and must be part of the written agreement between the two parties. If you are vague about your expectations, the result will very likely not be what you wanted. This is your fault, not theirs. They cannot read your mind, so you need to be clear about your expectations.

Then, follow up by checking each delivery to assure it is what you were expecting. Just as with a new employee, the early deliveries need closer inspection. Once you find that the deliveries are consistently just what you expected, you can save some time and resources by spot checking.

Although you cannot have the amount of control over outsourcing that you have over your employees, the savings are worth it as long as you are receiving the product you need for your company. In an effective relationship, your outsourcers become an extended part of your business family.

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