A survey by Accenture found that more than 50% of corporate executives consider outsourcing non-core functions, such as transportation and logistics, which are critical to improving supply chain management and company operations.
Some 80% of those executives said their companies were able to cut costs, improve efficiencies, enhance customer service and revenues, or improve competitiveness with supply chain management initiatives. Moreover, a growing number of companies are considering outsourcing additional supply chain activities such as procurement to enhance performance, said Bill Copacino, a partner in Accenture's supply chain management practice.
He said the trend toward outsourcing supply chain functions is being accelerated by the recession and the pressing need to enhance competitiveness. However, he warned that focusing solely on cost cutting can overshadow long-term strategic needs, which can be counterproductive at a time when supply chains need to become more global and customer focused.
"We've seen an increase in outsourcing in the economic downturn because it can often save companies significant costs, reduce fixed costs and assets, and create greater operating flexibility," said Copacino. "We are also seeing a willingness to consider outsourcing non-traditional activities such as procurement, supply chain IT applications development and maintenance, and even supply chain planning to enhance effectiveness in these critical activities."
Accenture also said more than 70% of those surveyed executives view the Internet as one of the most important factors in facilitating greater collaboration with key trading partners because of the visibility it provides upstream and downstream in the supply chain.
Accenture, formerly Anderson Consulting, conducted the survey in conjunction with Wirthlin Worldwide, polling 150 CEOs, chairmen, and executive vps at a variety of Fortune 1000 companies.
