passage below require analysis and breakdown

As the supply chain for companies has evolved from simple linear connections to an interconnected network spanning different functions, departments, countries, etc. there has become a need to start outsourcing parts of the supply chain. This complexity has lead companies to spend more time and money managing their supply chains in order to maintain smooth business operations and happy customers. However the time consumption and complexity of supply chain management has lead companies to outsource parts of the supply chain in order to have more time and resources to focus on their core competencies rather than expending time and assets on logistics management (Koppelman,2020). By allowing reliable third parties to take portions of the supply chain, companies can spend more time building new products, developing new ideas, market and strengthen customer relationships, and implement future growth strategies (Koppelman,2020). I found that often times people believe that this outsourcing can increase costs for a company, however in the 2014 Third Party Logistics Study it is reported that outsourcing reduced logistics costs) by an average of 11%, Inventory costs by 6%, and logistics fixed assets by 23% (Davis,2014). These increased costs can be due to the increased income from being able to spend more time on developing new products and strengthening relationships with customers, and can also be derived from limiting costs to pay and maintain staff that previously was having to be taken care of internally. Not only does outsourcing reduce operational costs but it also increases value in the sense that external supply chain partners bring capabilities and solutions that typically take several years for a company to develop internally. Since these third parties specialize in SCM they bring a valuable expertise to the table that is extremely valuable because they can leverage operational excellence tools to help boost efficiency and productivity in a business (Koppelman, 2020)

While outsourcing can generate strategic positioning and allow a company to spend less time managing their supply chain and more time to meet customer demand ultimately increasing the companys value, it is important to acknowledge that there are some operational challenges that can arise. There is the complexity of who will exercise authority and make important decisions about the work when it affects both parties (Sardana,2019). Also, depending on what third party is being used for outsourcing there can be differences in language, culture, currency, time, etc. if a company decides to outsource to a company overseas. These factors can lead to communication challenges, and while they are manageable, it is important to recognize the tools that need to be out in place as a risk mitigation. Lastly, outsourcing can lead to challenges with data security, because there is a loss of intellectual properties such as business plans, trade secrets, etc. which could pose the risk of data of a companys customers (Sardana, 2019). This can easily be address with a non-disclosure agreement, or another legally binding document. All of the potential challenges are manageable, however it is important to recognize the potential challenges and have tools, or processes in place in order to mitigate them.