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3 tips when outsourcing your supply chain

Photo of a man wearing a reflective vest and working in a warehouse. He is using a hand-held device to scan the label on a package.

When you're growing as a business, you don't just want to deliver a top-quality product -- you want to deliver, period. That's why it's vital to find the right logistics partner, one that can bolster your growth and make sure all aspects of your supply chain keep pace with the jump in demand.

"Growing companies can leverage the infrastructure UPS has in place, whether they are expanding across the country or around the world," says Alan Amling, UPS vice president of corporate strategy. "You can grow without having to invest a lot of capital into building new facilities, hiring people, or taking on new risks."

No matter whom you partner with, though, there are always certain questions a business should ask a potential logistics partner to ensure they're a great fit, and fully capable of boosting your operational efficiency. For starters:

Does it suit your product and your industry?

What works for a small parts manufacturer won't necessarily work for a pharmaceutical company that needs to ship temperature-controlled products across the country. No matter your line of business, you want your logistics partner to understand the unique challenges involved in shipping not just any product, but your product.

Dig into the provider's specific services. If you're shipping pharmaceuticals, for instance, does it offer refrigerated shipping options that will make sure your product is still usable by the time it reaches its destination? Or if you're an online retailer, does it have the nationwide transportation network needed to ensure you're covered in every regional market?

Consider how a potential logistic partner will adapt to your unique needs -- rather than simply whether they can move an item from point A to point B.

Will it drive further growth?

If a logistics partner is going to meet your needs, it has to accommodate your current growth and be prepared to keep up as your business continues to expand. Will making use of their services create a competitive advantage?

For example, look at one IT services company that partnered with UPS to streamline its supply chain. Initially, the company relied on its own employees to keep track of inventory, which was stored in locations as varied as storage lockers, customer sites, and even their own homes. But after joining forces with UPS, it transferred its stock to 80 UPS-managed facilities around the globe.

As a result, the company was able to access parts faster than ever before and, after integrating UPS's inventory software, saw a massive jump in work orders due to its new ability to match inventory needs with regional demand.

How will it track performance?

At the outset of any logistics partnership, your business and service provider will come up with a set of KPIs determining that will define a successful partnership. But does the logistics firm have the capabilities necessary to deliver these critical metrics?

From truck turnaround time to freight costs per unit shipped, it's important for your logistics provider to communicate performance-related information to your business and help you understand how your supply chain could be further finessed.

Some providers have incorporated cutting-edge technology to turn their fleets into moving repositories of data. For instance, UPS's trucks have been outfitted with a complex system of telematics that allows the provider to monitor everything from how the engine's running to where a given vehicle's route could be improved. As a result, customers can look forward to logistics services that are fully optimized -- with the numbers to back them up.

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