Blog/News

Before joining Complemar, my entire experience with the fulfillment industry was as a consumer. My previous background is in food & beverage manufacturing where outside processors and distributors were essential partners.  It’s been enlightening to sit on the other side of the table.  Here is the perspective of my former life. Hopefully, it provides insight into how clients evaluate outside partners from a financial perspective.

Outside Processor/Fulfillment Needs

• Provide flexible production to meet a seasonal surge in demand;
• Provide cost-effective solutions for special projects.  These projects included such things as:

o   Producing multi-flavor packs;

o   Producing special themed marketing & product offerings, particularly during holiday seasons;

o   Distributing products from an acquisition that did not fit in the firm’s current distribution and supply chain functions;

o   Re-working products due to manufacturing defects;

o   Destruction of defective products;

Strategic Partnering

Finance’s role is to provide analysis of the impact on future results while meeting the objectives shown above.

• Operations – it’s essential that operational requirements are understood so that internal base costs are properly captured. A clear understanding of the cost to do the outsourced activity will help lead to a positive financial decision;

• Sales/Marketing – Sales & marketing provide input on the packaging and other materials to operations. Understanding these costs is also critical to analyzing who should procure materials and at what cost;

• Quality – Need to validate potential outside partners for compliance with internal requirements and any costs need to be identified;

• Purchasing – validate costs for additional materials as well as assist with RFQ to make sure all costs are included;

Putting it All Together

After receiving input from the different teams, the finance work begins.  The final analysis should contain sufficient comparison to facilitate a decision.

• Tangible costs of each option compared to base;
• Cost avoidance is an important consideration and should be identified;
• Intangible benefits that have no identifiable costs or savings, but may have an important impact on the final decision of selecting an outside supply chain partner.

Highlighting these factors will strengthen the presentation and provide valuable data for the analysis that determines the client’s final decision.