When determining the return on investment for outsourcing stock keeping in the private sector and electrical utilities industry it is important to focus not just on the increases in cash flow that are generated, but also the expenditures, such as on capital projects, which can be avoided. This helps you to appreciate the full range of benefits that can be derived from engaging the services of an outsourced stock keeping agent.
Rapid Response Times
Your outsourced stock keeping agent can respond to requests for components rapidly, as they will have multiple locations containing the products you require, allowing them to source the components from their location closest to the site of your project. They also have the logistical assets on hand to deliver the components in a rapid fashion. Rather than having to order the part yourself and await delivery, or transport the equipment from your warehouse from the other side of the country, your outsourced agent can rapidly deal with your request to rectify your problem. This results in savings on logistics and transportation, and allows you to serve the needs of your customer or your project more efficiently than if you were attempting to solve the problem in-house.
Wider Range of Products
Your outsourced stock keeper will have a greater range of products available for you to choose from when you need to source the components for your project. They can also avail of their relationships with supplier and bulk purchases to negotiate better pricing. The volume of transactions they engage in versus a single player in the industry provides them with greater clout when it comes to closing deals, accessing new product lines and technologies, and getting preferential treatment from suppliers.
Less Capital Expenditures
Building and maintaining your own network of warehouses that are fully stocked with the components you anticipate you will need can be very capital intensive and an unwanted distraction from your core business. Sites need to be selected and purchased. Construction needs to be carried out, with the related costs and unforseen complications bringing a large facility online. Then the warehouses need to be stocked. Filling your own warehouse with a range of products can lead you to overstocking on certain items which may end up being unused, or becoming obsolete while they sit in storage. You will also require a fleet of trucks and haulage equipment to distribute the components to your various projects as they are required. All of these capital expenditures will have associated borrowing costs and interest payment to facilitate their construction before they begin adding value to the organization. There also significant staffing and training costs associated with building your own network of warehouses.
To find out how your organization can benefit from using the services of an outsourced stock keeping agent get it touch today to discuss your business needs and the services we can offer you.