Most companies outsource on some level or another. Just about any business activity can be outsourced. Outsourcing just means you go outside of your own firm for services, products, or processes that are needed for operations. For example, many firms outsource marketing and advertising, accounting and human resources - and, of course, customer service. Firms also outsource part of their supply chain. Clothing manufacturers go to external sources for fabrics; builders use external sources for lumber. Outsourcing is not new! Outsourcing is a more defined form of subcontracting. Outsourcing can remain here in the USA or sent overseas (off shored).
Offshoring involves sending part of a work process overseas or "off shore"" while keeping control of the process. For a long time, we've seen a mass exodus of production and manufacturing facilities to other countries where the labor costs are low and where the resources are cheaper. Over the past several years, we have begun to see offshoring services - customer support, accounting, finance, travel, and more. Most recently, research and development processes have been off shored. Since we are a global society and economy - thanks to technology, telecommunications and the Internet "- we can offshore just as easily as sending a work order downstairs to another department in the same office!
However, outsourcing and offshoring, especially offshoring, are not without risk. Problems can occur during the outsourcing and offshoring processes.
- Research and select a recent news story that deals with a problem that has arisen from offshoring production or outsourcing some segment of the supply chain.Note: Your news article MUST be within the past two years. Remember to properly cite your source using APA format. Include a link to the article.
- Provide a summary of the news item.
- Provide your opinion on the results.
- How could this issue or problem been avoided?
- Was the problem resolved; if so, how?
- What are advantages and disadvantages to outsourcing/offshoring for operations managers?
- Identify any international risk factors and possible political and legal repercussions in the decision to outsource/offshore.