Outsourcing Expands its Fan Base

Research confirms that sometimes others just do it better.


An executive with Tesco Homeplus remarked, “We are always looking to make the shopping experience easier and more convenient for our customers and the introduction of the virtual store is a great achievement. This is a real triumph for the Korean retailing industry as it continues to be at the forefront of technological innovation.”

Capitalizing on its success in Seoul, Tesco launched a follow up trial of the same concept in London’s Gatwick Airport, which was again met with an overwhelmingly positive response from the public. One observer commended Tesco for another landmark feat, and that was its ability to “commercialize otherwise flat and inert surfaces in places such as subways and bus stops.”

Overall, the speed and convenience that e-commerce affords the consumer puts all the more pressure on the retailer/manufacturer to deliver the goods. That’s where automation and software and technology come in, says Pyne. In order to support the demands of e-commerce, many companies, including those in the food and beverage sector, are looking to outsource the warehousing and fulfillment operations in order to have access to state-of-the art facilities that are running the most current WMS and other software solutions.

 

Finding the right outsourcing partner

Pyne has some advice for companies who are considering outsourcing, especially those new to the game. “First, do your homework. Take time to look at different providers, find out who they’re doing work for then visit those sites and talk to their clients. Make sure you’re comfortable with the job they’re doing for them,” he says.

According to Pyne, although the top reason companies outsource is to lower costs, only 55 percent of companies polled in Tompkins’ latest survey were satisfied with the results they were getting. This leads to another critical component of the due diligence phase, and that’s maintaining open lines of communication, he says.

For instance, “sometimes things change, like the price of fuel, or labor, or other elements.” An honest, open dialogue between the two parties will avert any unpleasant surprises when things change, especially if it affects a financial aspect of the relationship.

Lastly, Pyne says a good cultural fit is also necessary. “Price isn’t everything. Your outsourcing partner needs to really understand your business.”

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