Supply chain outsourcing permits you to save a lot of money which allows you to grow your teams, offer better service and expand your presence globally. As the supply chain market gets more competitive, every dollar matters and every metric is an opportunity for success.
Here are 10 ways in which supply chain outsourcing (outsourcing some of your jobs and business processes to foreign, remote teams) can help you with exactly that.
1. Supply Chain Outsourcing Can Mean Better Customer Service With a Lower Overhead
If you have a team of customer service representatives who manage your calls, clients and prospects then you understand how costly it can be to expand this department. However, you also understand how costly it would be if you didn’t have enough resources in this area.
An incomplete customer service team means unhappy clients, exacerbated problems due to inattention to their needs, missed sales opportunities (which means less money), and more. Having the right team means the opposite. Supply chain outsourcing is revolutionizing this aspect, especially in a post-pandemic world, by:
- solving current needs
- expanding resources where it wasn’t possible in the past
- mitigating problems with clientele
- increasing sales opportunities
So how does supply chain outsourcing provide these results? Well, if you’re paying $15/hour for one customer service representative then you are in fact paying, taking into account all the expenses that come with having an in-house employee, $30/hour. Taxes, insurance, space, equipment, liability, managing people on-site, human resources, etc. increases employee investment anywhere from 30% to 60% if not more.
Now, let’s say you outsource three of those representatives to a team in the Philippines. You’re now paying $10/hour but you’re only paying for their time worked and not for any other expenses. This means that your total cost is $30/hour – which is exactly what you were paying before – for 3 employees instead of one.
That’s not all. Supply chain outsourcing in customer service means that you also:
- have employees who can work different shifts (imagine announcing to your clients that you now offer 24 hours service)
- employees who are familiar with the cultures in and around southeast Asia
- employees who are more educated and experienced than local employees but at the same cost or lower
- a team of people who are absolutely loyal to your company because you offer them pay they cannot get in their home countries
2. Supply Chain Outsourcing Means a Stronger Back Office Team
Do you have employees wearing multiple hats? Perhaps an accounting head also doing accounts receivable and payable while juggling human resources responsibilities? To grow into a big company, you need to structure yourself like one. And the number one cause of back office inefficiencies is: employees juggling multiple roles, functions and processes because of overhead restrictions.
And it makes sense to start that way. An accounting team member can cost a company upwards of $70,000/year when all is said and done. Hiring a full human resources team when you’re just starting up can seem like an impossible investment. But as your company begins to grow, you’ll find that these inefficiencies will become more and more costly.
Every inefficiency in accounting means a direct hit to your income or expenses. Even if an in-house accountant is doing only accounting related functions, overload is still a problem. Typically an accounting department consists of two or more people. But as businesses grow, they need teams of accountants. Suddenly that $70,000 salary doesn’t look so bad when you compare it to the $200,000+ needed to support an in-house team of 4 or more accountants.
And that’s where supply chain outsourcing comes in. With a remote accounting team to back up your local team, you save money and reduce inefficiencies that permit your company to grow as optimally as possible.
3. A Supply Chain Company Starts With Human Capital and Outsourcing Helps With Exactly That
Modern successful companies have learned that, to grow and expand, a company needs to focus on more than the bottom line. It has to invest into its number one commodity, the people who make up every side of their organization. Supply Chain Outsourcing benefits human resource operations directly and permits precisely that.
A human resource manager typically costs about $90,000/year. But that’s not all, a human resource team also needs support from an operations manager and other staff to function properly. The total cost of an in-house human resource team can be upwards of $250,000/year.
Outsourcing your human resources to a remote team has many benefits but the primary benefit is reducing your human resources costs by as much as 60% while adequately staffing what may be your most important department – regardless of what industry you are in. But that’s not all, with a remote team you also get:
- A highly motivated and loyal team that will go the extra mile to support your company
- A team that is continuously learning and keeping up with the latest changes in compliance and labor laws
- The ability to hire quickly and efficiently without the hassle and time commitment of going through a lengthy hiring process
- A team that can hire in the US and abroad
- The ability to downsize quickly and without penalty
- A team that can work weekends and holidays to support your company’s global operations
What are the results of having an adequate human resources department? You avoid:
- Fines and penalties for non-compliance
- Lawsuits from disgruntled employees
- High employee turnover rates
- Difficulty attracting top talent
All of the above lead to one thing: a loss in revenue. So if you want to avoid these costly mistakes, outsource your human resources department to a remote team and get the support you need to grow. Supply chain outsourcing, as the subtitle says, means more than just direct supply chain processes. It means taking care of the people who make your company’s functions happen.
4. Supply Chain Outsourcing Your Sales Team Means More Clients and More Money
Every company has a killer salesman. The one salesperson who stands above the rest. But even the best, need a team to help them do even better. What does a sales department typically consist of? A sales manager, a couple of salespeople, and some support staff. The total cost of an in-house sales team can be upwards of $200,000/year.
Now imagine if you could take that same team and multiply it by 10. That’s the power of supply chain outsourcing. You get all the benefits of an in-house employee but at a lower cost and with better optimization.
If you think outsourcing your sales team means sending all your sales positions abroad, think again. Using the example of your best, local salesperson – consider the cost that goes into employing him or her. An excellent salesperson typically charges a base salary of $50,000/year plus commission. Commissions in sales can range from 10-20% of the deal so we’ll use a low number and say that your salesperson brings in $75,000/year in commission. In total, that salesperson costs you $125,000/year.
You might think that’s not bad. They pay for themselves and then some. But in reality, a one man show doesn’t cut it. The more time that salesperson spends on cold calling, or warm calling – the less time they spend closing and nurturing both clients and prospects. A supply chain outsourcing solution that many top companies employ is that they hire appointment setters who charge $8 to $10 per hour so that your $100k a year salesperson can focus on their bread and butter: closing.
On top of that, you can hire a data analyst who can make sure that the calls your company routes to your sales people are actual prospects who are ready to close.
You see, supply chain outsourcing is more than just replacing people. In fact, that’s a terrible way to describe outsourcing in general. The industry term is BPO. Business Process Outsourcing means exactly that: outsourcing processes and not necessarily people. You can definitely replace some employees by hiring remote people abroad. But the main goal is to improve performance by ensuring that low cost employees handle simple processes so that your local team can perform better.
The next point, however, is something to consider when hiring remote employees in other countries.
5. Supply Chain Outsourcing Means Expertise But at a Much Lower Cost
What does that mean? Consider GlobalityNet’s in-house team based in the Philippines. GlobalityNet has an office where their employees work out while serving companies in the United States. This means that when you hire through us, you get an employee and a management system that saves you, both, time and money.
However, GlobalityNet’s office is located a few blocks from one of the best Universities in the Philippines. The Philippines ranks as the 3rd largest English Speaking Country in the world. Academically, the Philippines outperforms most other Asian countries.
What does this mean for you, as a US based company? It means that you can hire accountants and back office professionals who have Bachelor’s or Master’s degrees and actual working experience – at a fraction of the cost of someone here.
So while, a BPO will help enhance your local team’s performance – it will also help replace some roles completely with highly equipped, better trained and more educated team members. Ask yourself:
How much would a local, US based employee with a Master’s degree who speaks 3 languages cost me?
The short answer is: a lot.
If you are thinking about growing your team and expanding your presence globally while saving hundreds of thousands of dollars… then a BPO is the solution you have been looking for. GlobalityNet is ready to help you hire, train and manage team members based in the Philippines and Mexico and get you on the road towards saving thousands while growing like never before. We’re excited to become your supply chain outsourcing solution providers.