In a May 2006 Market Analysis, IDC states that the procurement outsourcing market is no longer living in the shadow of hypervisible BPO segments such as customer care and HR. IDC estimates the worldwide procurement BPO market will expand at a five-year compound annual growth rate (CAGR) of 22.3 percent to $1.7 billion in 2010, representing fees for services, not including volume of goods and services being procured.

The Americas now account for the largest share (41 percent) of procurement BPO spending, and this share is slated to continue increasing, accounting for 55 percent of global spend by 2010.

The study also indicates that forward-thinking vendors will integrate procurement outsourcing with supply chain activities. 

ModusLink’s Operational Flexibility Helps Personal Navigation Manufacturer Meet High Demand Spikes (PDF)

ModusLink Implements New Supply Chain Model for NETGEAR Further Improving European Fulfillment

ModusLink offers a courtesy Supply Chain e-Mentoring Program^TM giving you access  to a panel of experts, available to answer your supply chain management questions. 

Why Outsourcing Is More "In" than Ever

The realities of how to bypass the buzz words and discover the real benefits of outsourcing

By Christine Pothier, Marketing Manager, ModusLink

In the news, reports of unsuccessful outsourcing engagements seem to get more play than positive stories, due to their morbid nature. But for every company that has faced an implementation gone awry for one reason or another, there are many more boasting success and satisfaction.

As an outsourcing provider ourselves, we decided to take an admittedly biased  look at the real benefits of outsourcing by evaluating the experience of four very different companies, with very different needs, to learn how they bypassed the buzzwords and marketing-speak to uncover the true value of this business model and how it could be put to work for them.

Christine Pothier

Our current issue focuses heavily on the complex problems facing manufacturers today and provides an interesting look at how outsourcing addresses these challenges. 

Did you know that inventory reduction and customer satisfaction are considered the top supply chain priorities?  We’ve included a recent Aberdeen Group study detailing interesting findings from their in-depth industry survey on the topic. 

These priorities, along with the complexity of globalization, expense of updating legacy warehouse management systems and the need for rigorous accounting and inventory oversight brought on by Sarbanes-Oxley, are all challenges causing technology companies to reevaluate their ability to effectively build and manage supply chains in-house. 

As companies contemplate the hottest question in business today — “To outsource or not to outsource?” — our feature article, takes an admittedly biased look at the real benefits of outsourcing by evaluating the experience of four very different companies as they tackle this question.

Major Component Manufacturer Reduces Inventory Levels by 50 Percent

A global presence is not enough — seamless global integration enables companies to reduce inventory yet meet market demands!

Today, many companies are seeking to globalize their supply chains, but the true benefits lie in global integration. Global integration goes beyond worldwide presence to provide the visibility and control needed to respond rapidly to global market dynamics and achieve the highest level of operating efficiency and cost-effectiveness.

With a single, collaborative view of supply chain functions, inefficiencies throughout the supply chain can be easily identified and corrected. For example, following a review of global production processes and export costs, ModusLink implemented a new global production model for one of the industry’s leading manufacturers of electronic components. The new solution leveraged in-region manufacturing and a direct-to-retail shipping model that significantly reduced inventory levels and total costs, including transportation and sourcing. To learn more about the benefits the manufacturer received, read the case study, which explains how ModusLink helped the company migrate from a fragmented, multivendor environment to a “single source” supply chain partner.

• New Study Details What Makes Outsourcing Relationships Work
  Why do some outsourcing relationships shine (next month's Outsourcing Journal will focus on eight relationships that won this year's Outsourcing Excellence Awards) and others fail miserably? Like the ineffable search for the formula for the perfect marriage, that seems to be outsourcing's million dollar question.
  By Beth Ellyn Rosenthal, Outsourcing Journal

• The Secrets to S&OP Success
  It is no secret that most companies struggle with even the basics of balancing supply and demand in their supply chains. Retailers have excess inventories for some products while facing high product shortages for others. Consumer products companies are challenged with building ahead of the seasonal curve, which is based at best on questionable histories and more often on uninformed hunches.
  By Maha Muzumdar and John Fontanella, Supply Chain Management Review

• Business Intelligence Research Report
  Download this FREE report to evaluate your organization's business intelligence strategies, and to learn what challenges your organization may face implementing these applications.
  From InfoWeek Magazine

• Aberdeen Group Study: The Supply Chain Innovator’s Technology Footprint
  Companies are valuing infrastructure technology such as business process management, visibility/alerting platforms and master data management. Nearly four times as many companies plan to spend more on new SCM technology in 2006 than plan to spend less. 56 percent of companies are planning 6-figure expenditures on new SCM technology projects in 2006.
  From SupplyChainBrain.com