Outsourcing And Supply Chain Management - Essay Example

Outsourcing can be defined as the procurement of services or products from an outside supplier of manufacturer in order to cut costs (Answers, 2011). In the United States outsourcing has a bad reputation among the general population. Americans feel that outsourcing is taking away valuable jobs from the community. India is one of the world’s top destinations for outsourced work. Companies along with manufacturing parts they also outsourced their services. Functions like customer service are often outsourced to call centers outside the United States. One of primary advantages of outsourcing is that it enables companies to reduce costs. One of the disadvantages of outsourcing work is that the company loses the ability to control its quality. Another advantage of outsourcing is that it creates flexibility for an enterprise. The cost savings achieve through outsourcing can be a critical success factor that keeps a particular company in business. In the auto industry companies often outsourced the production of auto parts. My sister was a victim of outsourcing because her company shut down operations in America to move to Asia. Answers.com (2011). Outsourcing. Retrieved February 13, 2011 from http://www.answers.com/topic/outsourcing 2. The supply chain management of an organization is a very important factor that can make or break a company. Supply chain management is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers (Wailgum, 2008). A company that in the 1990’s was able to separate itself from the competition due to its unique supply chain management techniques was Dell Corporation. Dell revolutionized the computer industry by becoming the first virtual computer company. The firm saved a lot of money in inventory costs by delivering turn-key computer products to its customers. A few years ago I worked for a company that changed its suppliers three times during a year due to the fact that none of the companies supplied raw materials would provide an adequate level of service. Wailgum, T. (2008). Supply Chain Management Definition and Solution. Retrieved February 13, 2011 from http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and_Solutions 3. Outsourcing has gotten a bad reputation from many Americans who viewed outsourcing as an evil business strategy that is hurting the US economy by taking jobs oversee. The reality is that outsourcing is saving more jobs than what is taking away. If American companies did not utilize outsourcing on many occasions these firms would not be able to compete. Outsourcing provides companies with much needed savings. The savings achieved through outsourcing enables companies in America to keep their prices competitive. 4. Outsourcing has become a very popular concept that is gaining popularity across America. In 2010 the television broadcasting network NBC developed a parody series called Outsourcing. The series is a comedy that illustrates how American companies are moving their service operations to India in order to reduce costs. In the series only the manager is American, while the rest of the staff is composed of India workers. When I watched this series I sometimes ask myself how spread is the outsourcing movement in America. In the series the workers are highly competent salespeople that get the job done. 5. In a way outsourcing affects most businesses in America directly or indirectly. You mentioned that in your dentistry practice the business is affected by outsourcing from the material acquisition perspective. Many companies nowadays choose to buy parts and raw materials from China and India due to their lower costs. Purchasing materials from these countries enables American companies to be able to keep their prices low. Businesses are not the only ones looking for a bargain these days. The internet has allowed people to compare prices and find the lowest possible price on their purchases. 6. Your response was very insightful because it showed the effects culture has on business practices. Despite working in Korea you did not realize that the staff would have a high resistance to change. I personally have never worked oversee, but my father who an engineer has. He worked in Mexico as a manager for about two years. He told me that when he started working in Mexico there were a lot of inefficiencies in the factory. When he tried to implement changes there was a lot of resistance to change. He was suppose to be in Mexico for a months, but due to the human factor it took two years to implement all the necessary changes. 7. An important aspect of any supply chain management in an organization is to establish close relationships with your suppliers. The suppliers of an enterprise should be viewed as allies or partners that can help a business. For example a company might need to have a special order of suppliers delivered earlier. A normal supplier will typically not change their operating procedures to accommodate a new customer, but when a company has close relationship with a supplier these types of request are viable. 8. Value stream mapping can be defined as a visual diagram that represents the activities that occur to produce a product or service through the design, source, make and deliver functions (Bexcellence). The two most important components of value stream mapping are flow of materials through transformation processes and the flow of information that support the transformation process. In today’s manufacturing environment the information component is often provided with the assistance of computerized equipment. Value stream mapping can be implemented in an organization to achieve process improvements. Bexcellence.org. Value Stream Mapping. Retrieved February 13, 2011 from http://www.bexcellence.org/value-stream-mapping.html 9. A lot of times a lack of communication between the manager and the workers hurts the quality improvement process. The workers have to understand the reason why changes are made. If the workers don’t understand the reason why changes are made they might perceive the changes as added work that adds no value to the company. Also as you mentioned motivation is very important to achieve maximum productivity. Read More