Outsourcing - Supply analysis

Identification of market for ranges of needed services can be made on the basis of information provided by potential service providers. Company should send RFI document (Request For Information) to each of those potential providers. It is necessary to identify the current state of the market in specific field, to assess the possibility of outsourcing particular processes in the future. On the basis of the established service providers list containing information of the offer available on the market, managers can make adjustments of processes that should be entrusted to the service provider.

Subsequently, the list of entities to whom inquiries were directed should be analysed to eliminate enterprises with insignificant achievements, small scope of the services or small experience. After limiting the number of potential service providers and analysing of information about their skills, managers can specify requirements concerning not only the ranges of outsourced tasks, but most of all, the ways of their implementation and the expected level of quality. These requirements should be submitted to the chosen service providers and they should be used as criteria for their selection. The primary goal at this stage is to select such provider, that will be able to satisfy the requirements of the company in the long run.

After this, ranking of potential service providers can be established, and final decision can be made by managers. Ranking makes it easier for subsequent preparation of a list of reserve service providers when managers select the major provider of service for outsourced processes.

See also:

• Supply logistics subsystem
• Principles of Supply Chain Management
• Types of supply

Outsourcing - Supply analysis — recommended articles

Request For Information — Production planning — Controlling variants — Procurement procedures — Modeling of production development — Operational decision — Internal benchmarking — Preparation of project — Best value

References

• Grossman, G. M., & Helpman, E. (2005). Outsourcing in a global economy. The Review of Economic Studies, 72(1), 135-159.