Outsourcing
The growth of outsourcing in recent years by many businesses is not just driven by shortage of capacity. These are several major reasons for outsourcing, as discussed in this article.
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Operations Management
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Subject: Operations Management
Outsourcing
The growth of outsourcing in recent years by many businesses is not just driven by shortage of capacity. These are several major reasons for outsourcing: a. Reduction and control of operating costs. Instead of employing expensive specialists that might not be kept busy at all times it could be cheaper to ‘buy in’ specialist services or products as and when needed. Outsourcing firms may be cheaper because they benefit from economies of scale, as they may provide similar services to a large number of other businesses. Much outsourcing involves offshoring – buying in services, components or completed products from low-wage economies. b. Increased flexibility. By removing departments from the staff payroll and buying in services when needed, fixed costs are converted into variable costs. Additional capacity can be obtained from outsourcing only when needed and contracts can be cancelled if demand falls much more quickly than closing down whole factories owned by the business. c. Improved company focus. By outsourcing ‘peripheral’ activities the management of a business can concentrate on the main aims and tasks of the business. These are called the ‘core’ parts of the business. So, a small hotel might use management time to improve customer service and outsource the accounting function completely. d. Access to quality service or resources that are not available internally. Many outsourcing firms employ quality specialists that small to medium-sized businesses could not afford to employ directly. e. Free up internal resources for use in other areas. If the human resources department of an insurance company is closed and the functions bought in, then the resulting office space and computer facilities could be made available to improve customer service.
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*The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
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Subject: Operations Management
There are potential drawbacks to outsourcing too: a. Loss of jobs within the business. Workers who remain directly employed by the organisation may experience a loss of job security, reducing motivation. Bad publicity may result from redundancies, especially if the business is accused of employing very low-wage employees in other countries to replace the jobs lost. The firm’s ethical standards could be questioned. b. Quality issues. Internal processes will be monitored by the firm’s own quality assurance system. This will not be so easy when outside contractors are performing important functions. A clear contract with minimum service-level agreements will be needed. The company contracting out the functions may have to send quality assurance staff out to the business undertaking the tasks to ensure that product quality and customer service standards are being met. c. Customer resistance. This could take several forms. Overseas telephone call centers have led to criticism about inability to understand foreign operators. Customers may object to dealing with overseas outsourced operations. Bought-in components and functions may raise doubts in customers’ minds over quality and reliability. d. Ethical concerns. If outsourcing is undertaken by firms in countries with poor human rights or employment rights records, it may be cheaper for the business that has outsourced – but how will the media and consumers view this potentially unethical decision?
Operations Management Homework Help from Classof1.com
*The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
submitting the same in lieu of their academic submissions for grades.
Subject: Operations Management For more details on Classof1 or customized academic assistance please feel free to write to us at [email protected] or call our toll-free number 1- 877- 252- 7763. The list of subject areas in which we offer academic assistance is as given below:
1 Accounting 23 Engineering 24 English 25 Environmental Engineering 26 Environmental Science 27 Essay Writing 28 Finance 29 Financial Accounting 30 General Studies 31 Geography 32 Geology 33 HBS Case Studies 34 History 35 Hospitality Management 36 Human Resource Management 37 Information Systems 38 International Economics 39 International Finance 40 Investment Portfolio Management 41 MS-Office 42 Macro Economics 43 Management Accounting 44 Marketing 45 Mass Communication 46 Materials Engineering 47 Math 48 Mechanical Engineering 49 Medical Science 50 Micro Economics 51 Nursing 52 Operations Management 53 Philosophy 54 Physics 55 Physiology 56 Political Science 57 Psychology 58 Religious Studies 59 Rhetoric 60 Social Studies 61 Social Work 62 Sociology 63 Statistics 64 Taxation 65 Zoology 2 Actuarial Science 3 Anatomy 4 Anthropology 5 Architecture 6 Astronomy 7 Biochemical Engineering 8 Biochemistry 9 Biology 10 Business Law 11 Business Management 12 Chemical Engineering 13 Chemistry 14 Civil Engineering 15 Classical Studies 16 Computer Science 17 Corporate Finance 18 Corporate Strategy 19 Cost Accounting 20 Earth Science 21 Economics 22 Electrical Engineering
Operations Management Homework Help from Classof1.com
*The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
submitting the same in lieu of their academic submissions for grades.
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Step-by-Step Solutions
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Experienced Tutors Detailed Explanation
www.classof1.com/homework-help/operations-managment
Subject: Operations Management
Outsourcing
The growth of outsourcing in recent years by many businesses is not just driven by shortage of capacity. These are several major reasons for outsourcing: a. Reduction and control of operating costs. Instead of employing expensive specialists that might not be kept busy at all times it could be cheaper to ‘buy in’ specialist services or products as and when needed. Outsourcing firms may be cheaper because they benefit from economies of scale, as they may provide similar services to a large number of other businesses. Much outsourcing involves offshoring – buying in services, components or completed products from low-wage economies. b. Increased flexibility. By removing departments from the staff payroll and buying in services when needed, fixed costs are converted into variable costs. Additional capacity can be obtained from outsourcing only when needed and contracts can be cancelled if demand falls much more quickly than closing down whole factories owned by the business. c. Improved company focus. By outsourcing ‘peripheral’ activities the management of a business can concentrate on the main aims and tasks of the business. These are called the ‘core’ parts of the business. So, a small hotel might use management time to improve customer service and outsource the accounting function completely. d. Access to quality service or resources that are not available internally. Many outsourcing firms employ quality specialists that small to medium-sized businesses could not afford to employ directly. e. Free up internal resources for use in other areas. If the human resources department of an insurance company is closed and the functions bought in, then the resulting office space and computer facilities could be made available to improve customer service.
Operations Management Homework Help from Classof1.com
*The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
submitting the same in lieu of their academic submissions for grades.
Subject: Operations Management
There are potential drawbacks to outsourcing too: a. Loss of jobs within the business. Workers who remain directly employed by the organisation may experience a loss of job security, reducing motivation. Bad publicity may result from redundancies, especially if the business is accused of employing very low-wage employees in other countries to replace the jobs lost. The firm’s ethical standards could be questioned. b. Quality issues. Internal processes will be monitored by the firm’s own quality assurance system. This will not be so easy when outside contractors are performing important functions. A clear contract with minimum service-level agreements will be needed. The company contracting out the functions may have to send quality assurance staff out to the business undertaking the tasks to ensure that product quality and customer service standards are being met. c. Customer resistance. This could take several forms. Overseas telephone call centers have led to criticism about inability to understand foreign operators. Customers may object to dealing with overseas outsourced operations. Bought-in components and functions may raise doubts in customers’ minds over quality and reliability. d. Ethical concerns. If outsourcing is undertaken by firms in countries with poor human rights or employment rights records, it may be cheaper for the business that has outsourced – but how will the media and consumers view this potentially unethical decision?
Operations Management Homework Help from Classof1.com
*The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
submitting the same in lieu of their academic submissions for grades.
Subject: Operations Management For more details on Classof1 or customized academic assistance please feel free to write to us at [email protected] or call our toll-free number 1- 877- 252- 7763. The list of subject areas in which we offer academic assistance is as given below:
1 Accounting 23 Engineering 24 English 25 Environmental Engineering 26 Environmental Science 27 Essay Writing 28 Finance 29 Financial Accounting 30 General Studies 31 Geography 32 Geology 33 HBS Case Studies 34 History 35 Hospitality Management 36 Human Resource Management 37 Information Systems 38 International Economics 39 International Finance 40 Investment Portfolio Management 41 MS-Office 42 Macro Economics 43 Management Accounting 44 Marketing 45 Mass Communication 46 Materials Engineering 47 Math 48 Mechanical Engineering 49 Medical Science 50 Micro Economics 51 Nursing 52 Operations Management 53 Philosophy 54 Physics 55 Physiology 56 Political Science 57 Psychology 58 Religious Studies 59 Rhetoric 60 Social Studies 61 Social Work 62 Sociology 63 Statistics 64 Taxation 65 Zoology 2 Actuarial Science 3 Anatomy 4 Anthropology 5 Architecture 6 Astronomy 7 Biochemical Engineering 8 Biochemistry 9 Biology 10 Business Law 11 Business Management 12 Chemical Engineering 13 Chemistry 14 Civil Engineering 15 Classical Studies 16 Computer Science 17 Corporate Finance 18 Corporate Strategy 19 Cost Accounting 20 Earth Science 21 Economics 22 Electrical Engineering
Operations Management Homework Help from Classof1.com
*The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
submitting the same in lieu of their academic submissions for grades.
