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206global sourcing

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  • 1. Global sourcing
  • 2. Global sourcing
    • Sourcing
      • Identify, select and develop suppliers
    • Outsourcing
      • A management strategy by which major non-core functions are transferred to specialist, efficient, external providers
    • Global sourcing
      • Identify, select and develop suppliers including outsourcing partners globally
    • (Pg 392)
  • 3. Competitive advantage
    • Outsourcing
      • Reduce cost
    • IPS
      • Procurement specialist
  • 4. Activities most outsourced
    • Resource-intensive – high labour or capital cost
    • Require specialist competence
    • Rapid changing technology, requiring expensive investment
    • Quick changing market, for which it is costly to recruit, train and retain staff
    • Fluctuating work patterns in loading and throughput
    • ( Pg 392)
  • 5. Outsourcing purchasing
    • Where purchasing is a peripheral rather than a core activity
    • Where the supply base is small and based on proven cooperation and there are no supply restrictions
    • Where there is a small supplier base providing non-strategic, non-strategic, non-critical, low-cost, low-risk items (Pg 400)
  • 6. Drivers of outsourcing
    • Higher quality
    • Lower cost of supply
    • Limited finance
    • Focus on core business
    • Cooperation – outsource to avoid conflicts
    • HRM considerations
      • Avoid conflicts with trade union
      • (Pg 400)
  • 7. Discuss
    • What could be the reasons of outsourcing for
      • IBM
      • Keytronis?
  • 8. Benefits of outsourcing
    • Frees management time
    • Reduced staff costs
    • Increased flexibility
    • Cost certainty
    • Reduction in staff management problem
    • Improved consistency of service
    • Reduced capital requirements
    • Reduced risk (Pg 401)
  • 9. Discuss
    • What are the benefits of outsourcing to
      • IBM
      • Keytronics?
  • 10. Problems of outsourcing
    • Quality of service
    • Long-term commitment
    • Communication with suppliers
    • Dependence on few suppliers
    • Extra training
    • Reduction in flexibility
    • Coordinating different suppliers
    • Redundancy payments
  • 11. Discuss
    • What could be the problems of outsourcing to
      • IBM
      • Keytronics?
  • 12. Objections to outsourcing
    • Loss of competitive advantage
      • Loss of skills, expertise, insufficient internal investment, passing of knowledge and expertise to suppliers
    • Overdependence on suppliers
    • Lack of management skills to control suppliers
    • Unrealistic expectations of outsourcing providers
    • (Pg 402)
  • 13. Discuss
    • What would be your objections, if any, to outsourcing arrangement for
      • IBM
      • Keytronis?
  • 14. Problems of outsourced suppliers
    • High staff turnover
    • Poor project management skills
    • Lack of commitment
    • Shallow expertise
    • Insufficient documentation
    • Lack of control over large suppliers
    • Poor staff training
    • Page 403
  • 15. Discuss
    • What would be the usual problems that can happen to the outsourced suppliers of
      • IBM
      • Keytronics?
  • 16. Implementing outsourcing
    • Fig 11.7, Page 403
    • Seven steps to making a decision about strategic outsourcing
  • 17. Outsourcing - NIKE
    • Take some ideas from NIKE outsourcing with Taiwan and Korea companies in Asia
  • 18. Discuss
    • Assess the advantages and disadvantages of global sourcing strategies used by both IBM and Keytronics.
    • What is global sourcing?
    • Assess the advantages and disadvantages of global sourcing strategies
    • Conclusion
    • Notes:
    • Relate to IBM and Keytronics
    • Read page 515 and 521