Advantages Of Outsourcing As A Supply Chain Strategy

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Outsourcing as a Supply-Chain Strategy 1. How would you summarize outsourcing trends? The main objective of a company is to save money, with that said. Many companies are outsourcing and it has become huge a business trend. Most companies outsource for the main reason of reducing cost and remain profitable. Basically a business in the U.S will contract with a company in a foreign country such as India or China to make their product or service at a lower cost. Outsourcing can help a company by giving them a chance to focus on other driving factors that will increase the company's performance. 2. What potential cost saving advantages might firms experience by using outsourcing? Outsourcing can be an efficient way of stretching a company's budget. When costs are too high and they want to save money, they can fire employees and hire more people overseas to conduct their business at a lower labor cost. Also, consumers will get goods and services faster and at a cheaper price. In some cases, workers are replaced by machines because they are cheaper and produce better quality products. By sending jobs to other countries, companies do not have to increase their payroll.…show more content…
What internal issues must managers address when outsourcing? Outsourcing is not always successful and there are risks that are associated with it. So it is important for Managers to first identify the company objectives, the best strategic plan, benefits and the risks that may be involved. Managers may want to look at their competitors as well. Competiton opens up opportunity for all potential suppliers to conduct business with various companies. By evaluating businesses that have undertaken outsourcing and learn from their sucess and mistakes is a great way to avoid failure. Managers should consider cost benefit analysis of all internal and external

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