Hala's insourced relationships mean profitability and competitiveness

Planning and forecasting therefore emerge as the biggest challenges facing supply chain managers. In parallel to these changing and challenging circumstances, supply chain managers are also finding it increasingly difficult to find skilled staff.

"If you want an integrated, flexible, highly visible and tightly controlled supply chain that drives costs down and service up - create an 'insourced' supply chain partnership."

This is the advice of Pieter Spaarwater, business development manager and lead consultant of logistics operator Hala Supply Chain Services.

The reaction of the world's most successful companies to these challenges has been to form relationships with skilled supply chain and logistics companies. Their success levels compared to those of their competitors are testimony to the wisdom of this strategy.

"The reason that the world's most successful companies are more likely to use both 4PL and 3PL suppliers are that these relationships help them to overcome the skills shortage, while they also introduce more flexibility and competitiveness into the supply chain and logistics system. These supply chain managers have developed such close relationships with their "outsourced" suppliers, and their levels of visibility, integration and control are so high, that the word outsource is really a misnomer. At Hala, we call this type of relationship "insourcing" rather than outsourcing," says Spaarwater.

In these "insourced" relationships, client supply chain managers find their service levels improving, their costs coming down, their visibility and flexibility improving and their levels of control increasing. The benefits to the client company are measured ultimately in improved profitability and competitiveness. Research in both developed and developing countries proves that those companies that are best able to manage the growing complexity in their supply chains are the ones that are experiencing the highest levels of profit and success.

"Hala's attitude to supply chain management is the key differentiator. We can augment skill levels and even run some of the functionality for a client if they so require, but we can never understand a client's business like they do. It's why we call our engagement process "insourcing". It's about creating the benefits with the client while increasing their level of control at the same time," said Spaarwater.

The process begins with clients who wish to explore the potential of an insourced approach, commissioning Hala to model and optimise their existing supply chain. A project team consisting of Hala experts and client supply chain management is then established. The model is then built and optimised, and a cost/benefit proposal is established. The client decides on the extent and pace of transformation that is preferred, and Hala then implements the changes in collaboration with client. Benefits of higher service, flexibility and visibility, and lower costs begin to accrue.