Certified Supply Chain Professional (CSCP) Practice Exam

Before outsourcing an activity, a supply chain company should critically assess whether the activity is a core competency. Core competencies are the unique strengths and capabilities of a company that provide competitive advantage and create value for customers. When determining whether to outsource, it is essential to consider if the activity significantly contributes to the company's competitive edge. Outsourcing a core competency may weaken the organization's competitive position, as it relies on external providers to handle tasks that are fundamental to its success. If the activity is a core competency, it typically signifies that the company has developed specialized knowledge or skills that differentiate it in the marketplace. By keeping such activities in-house, the company can maintain control over quality, customer relationships, and its strategic direction. In contrast, asking if the activity is budget-friendly, can be automated, or pertains to market demand relates to tactical considerations that are important but not as foundational as understanding the implications of outsourcing core competencies. Balancing costs, exploring automation, and aligning with market demand are vital, but they should come after establishing whether an activity is essential to the company's overall strategy and market positioning.