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More Companies Choose To Outsource – Here’s Why You Should Too


More Companies Choose To Outsource – Here’s Why You Should Too

When it comes to outsourcing, businesses take different approaches based on their goals. Some focus on increasing efficiency, some on lowering the cost of their products or services. whatever the reason may be, outsourcing is becoming more popular than ever due to its many benefits. In this post, you will learn what outsourcing is and why many businesses outsource certain operations, especially on the logistics side of operations.

What Is Outsourcing?

In business, outsourcing is the practice of contracting an external company or organization to provide a product or service that the firm itself would otherwise produce. It has been associated with job moves overseas in recent years, though this is not always the case. Outsourcing can be done in other companies within the same country and isn’t always for fiscal reasons. For example, one of the most famous forms of outsourcing can be seen with Amazon’s Fulfillment by Amazon program. In essence, online retailers will outsource their logistical needs to Amazon to focus on their core business rather than handling packaging, deliveries, and refunds. This is just one form of outsourcing.

Many businesses are finding that they need to use sophisticated technology to scale their business to new heights. However, this is often easier said than done. For instance, if a company is looking for a fully equipped remote IT support service, they might outsource this to a company that understands this topic deeply instead of setting up new technical departments and hiring a raft of new staff. In this instance, choosing a company experienced in this sector makes financial sense and makes practical sense in that they want it done by a business that understands the task. In light of the above, what are some of the biggest benefits of outsourcing certain aspects of a company?

Businesses Can Focus On Your Core Business

One of the primary reasons many businesses outsource is to focus on the things that make them money. By looking at the earlier example of Amazon, you can see the benefits an online retailer has when outsourcing their logistical needs to another company (especially one as far-reaching as Amazon). Logistical operations are hugely complex, time-consuming, and costly if incorrectly handled. Therefore, this leaves only two options for most businesses:

1. Hire and train new staff

2. Outsource

Although hiring new staff may be cost-effective for large multinationals, many SMEs simply cannot afford to invest the time and money in such a task.

Technology Is Accessible Without The Investment

Operations like supply chain management and logistics often require significant investments in specialist technologies to facilitate smooth and accurate operations. Similar to why you choose not to hire and train new staff, many SMEs do not have the resources to invest in the technology needed to perform these complex tasks. Furthermore, logistics is often only a certain percentage of business operations, so directing resources in technology that you will only use a certain amount of the time is unfeasible. Outsourcing this part of your business to a business devoted to it entails paying a fair amount for them to manage this part of your business and invest in the technology required for successful completion.

It Can Improve Customer Satisfaction

Continuing the e-commerce example, it is clear that outsourcing the delivery of goods facilitates a higher level of customer satisfaction. For example, no matter how much you strive to make customers happy, it is inevitable that some items will be faulty (especially if you have a high revenue). In these cases, it is good practice to simply ask your customer to return the product and provide them with a replacement or a refund. Even though this sounds straightforward, it is fundamentally a loss-making activity you’d rather avoid and instead focus on the profitable side of the business. If said e-commerce business had outsourced this task to a logistics company, they would be responsible for returns and replacements, thus allowing the business to focus on its core activities while maintaining a happy customer base.

Reduced Liabilities

While this point is aimed explicitly at the logistical side of things, it also applies to other industries. By not having to deliver products, a company will immediately cut out the myriad of liabilities that comes with transposition, from accidents to lost packages, etc. However, this also holds for other industries. For example, a company might need a bespoke piece of software to perform specific tasks. By outsourcing to another company, they don’t have to worry about an intellectual property infringement as this will be covered by the outsourced software provider.

Outsourcing can be a massive benefit to businesses. Businesses can save money by outsourcing manufacturing, marketing, logistics, and even accounting. It allows companies to focus on their core competencies and plow all of their efforts into the profitable parts of their business.

yakima chief hops

How WMS Allows Yakima Chief Hops to Increase Customer Satisfaction

As a 100% grower-owned network of family hop farms, Yakima Chief Hops is uniquely positioned to establish strong relationships between the growers who supply their super-premium hops and the innovative brewing customers who utilize their products in their beer. YCH are also committed to being an environmentally and socially responsible company as well as a responsible neighbor and asset to their communities.


YCH’s Supply Chain Needs


YCH comprises 59 users located in 3 campuses, which in turn are located in Sunnyside and Yakima in California, as well as a new one Belgium. Each of these facilities has its own warehouse. These facilities function with multi-channel distribution to supply a variety of clients, from private to commercial brewers, using eCommerce.

YCH’s commitment to safety and complete traceability of their ingredients requires precise inventory visibility,  control, and tracking elements from the field all the way to the transformation process. Inventory accuracy is the key for success and for YCH to reach their data visibility goals.

Generix Group’s WMS as a Solution

YCH decided to implement Solochain WMS to gain the inventory accuracy they needed. With the warehouse management system, YCH collected constant data on the movement of their products in their facilities. Thanks to this visibility, they cut losses from inventory mistakes that the system enabled them to avoid.

The Solochain WMS also integrated with the Sage X3 ERP and Magento eCommerce due to the flexibility of the WMS.

Goals Achieved

Automating: Opting for automation and switching to the WMS allowed YCH to reduce paper usage by shifting from a pen and paper process to scan guns, which also allowed them to store more data while being more efficient. In addition, automation enabled them to trace the hops to their original growers. This also makes recall management easier and the products safer.

Cost Reduction: The new system increased YCH’s precision and decreased losses related to inefficiency. Inventory visibility assured that YCH stopped experiencing the lost inventory cases they had prior to implementation.  Once the Solochain WMS was implemented, the company realized a net gain of 83,861 Cartons that did not have to be transferred prior to shipping out to the customers.

Increase in Customer Satisfaction:  YCH has been able to cut multiple days from their shipping time which has improved the satisfaction of their customers who received their orders much faster. They also achieved a 24-hour turnaround for eCommerce leading to satisfied customers.

Better Environment for Employees: Employees experienced a smooth change from the old system to the new one. The user-friendly Solochain interface helped the adaptation and provided a process that employees could use more comfortably and that allowed them to work more efficiently.

Solochain WMS helped Yakima Chief Hops in their strive for increased visibility, safety, and quality of service. The gained inventory visibility facilitated recalls when necessary, while the increase in warehouse management efficiency allowed YCH to offer a faster and more precise service to their customers.

As a 100% grower-owned network of family hop farms, Yakima Chief Hops is uniquely positioned to establish strong relationships between the growers who supply our quality hops and the brewing customers who utilize our products in their beers.

About Yakima Chief Hops:

“Operating for more than 30 years, we have become more than a hop supplier. We are a resource for brewers, providing solutions-based products and industry-leading research. We are advocates of sustainability and meaningful social causes, working to support the environment and communities around us. Through our commitment to continuous improvement, we aim to be leaders of innovation, quality and customer service.”

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission.