Outsourcing Ppt 1


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  • you can use my email apondipetty@gmail.com
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  • please i need more research on capital and revenue purchasing techniques
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  • plz send me the attachment of ppt at malikmohsin91@gmail.com
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  • Hello Mr. Anand Raj,
    Impressive work.
    I am working in a 3PL company & it will be of good help if you can share the ppt with me at amitav_chatterji@yahoo.com
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Outsourcing Ppt 1

  1. 1. Outsourcing Anand Raj Singh
  2. 2. Brief History Of Outsourcing <ul><li>IT Outsourcing Contract Signed By Eastman Kodak In 1989 </li></ul><ul><li>Chapter 1 of Outsourcing Launched </li></ul><ul><li>Early 90’s Saw Big Companies In Big Trouble </li></ul><ul><li>Characteristics of Chapter 1 of Outsourcing </li></ul>
  3. 3. Industry Segmentation <ul><li>Service </li></ul><ul><li>Consulting </li></ul><ul><li>Legal </li></ul><ul><li>Design </li></ul><ul><li>BPO </li></ul><ul><li>etc…… </li></ul><ul><li>Manufacturing </li></ul><ul><li>Production </li></ul><ul><li>Purchasing </li></ul><ul><li>Logistics </li></ul><ul><li>etc….. </li></ul><ul><li>  </li></ul>
  4. 4. Production Outsourcing <ul><li>Cost Saving </li></ul><ul><li>The external vendors work across corporate </li></ul><ul><li>boundaries, combine various production volumes </li></ul><ul><li>of multiple clients, maximize the utility of </li></ul><ul><li>machines, labor, and capital, thereby finally </li></ul><ul><li>achieving the cost reduction. </li></ul><ul><ul><li>Labor Cost </li></ul></ul><ul><ul><li>Fixed Cost </li></ul></ul><ul><ul><li>Inventory Cost </li></ul></ul><ul><ul><li>Capital Cost </li></ul></ul>
  5. 5. Production Outsourcing Advantages & Disadvantages Is Production Outsourcing Good? Increased Flexibility Core Competence Focus Reduced Risks Managerial Control Loss Vendor Relationship Management Risks Internal Talent Loss <ul><li>Advantages </li></ul><ul><li>Disadvantages </li></ul>
  6. 6. Production Outsourcing <ul><li>Steps In Production Outsourcing: </li></ul><ul><ul><li>Supplier Proposals </li></ul></ul><ul><ul><li>Supplier Competition </li></ul></ul><ul><ul><li>Negotiations </li></ul></ul><ul><ul><li>Contract Finalization </li></ul></ul><ul><ul><li>Transition </li></ul></ul><ul><ul><li>Transformation </li></ul></ul><ul><ul><li>Execution Of Outsourcing </li></ul></ul><ul><ul><li>Termination or Renewal </li></ul></ul>
  7. 7. PURCHASING <ul><li>“ Purchasing refers to a business or organization attempting to acquire goods or services to accomplish the goals of the enterprise” </li></ul><ul><li>- National Purchasing Institute </li></ul>Company name
  8. 8. PURCHASING <ul><li>Advantages Of Outsourcing </li></ul><ul><ul><li>Reduce Costs, Improve quality and Optimize Operations </li></ul></ul><ul><ul><li>---Raw material purchasing </li></ul></ul><ul><ul><li>Share Risks & Stop Product Duplication </li></ul></ul>Company name
  9. 9. PURCHASING <ul><li>Disadvantages Of Outsourcing </li></ul><ul><ul><li>Loosing Managerial Control </li></ul></ul><ul><ul><li>Hidden Cost </li></ul></ul><ul><li>- Legal costs </li></ul><ul><li>- currency value differences </li></ul><ul><li>- government mandated regulations, duties and tariffs </li></ul><ul><li>- transportation time, cost and Customs requirements </li></ul>
  10. 10. PURCHASING Special Considerations when Outsourcing Purchasing <ul><li>Considerations </li></ul>Product Process Location Are we sourcing the right part or the right product? The absolute lowest direct cost isn’t always the best thing to do Quality and total cost checking
  11. 11. PURCHASING <ul><li>Why Outsourcing? </li></ul><ul><li>Physical assets Intangible capabilities </li></ul><ul><li>When Outsourcing? </li></ul><ul><li>When a partner could provide a capability more effectively than the company could itself. </li></ul>
  12. 12. PURCHASING <ul><li>How? </li></ul><ul><ul><li>Identifying Core Components Of Business </li></ul></ul><ul><ul><li>Identifying Economies Of Scale </li></ul></ul><ul><ul><li>Identifying The Implication Of No Loss Of Quality Due To Long Distance Sourcing </li></ul></ul>
  13. 13. PURCHASING
  14. 14. Logistics Outsourcing <ul><li>Definition </li></ul><ul><li>Why 3PL Has Grown </li></ul><ul><ul><li>Greater Complexity </li></ul></ul><ul><ul><li>Shorter Cycle Time </li></ul></ul><ul><ul><li>Latest Logistics Technology </li></ul></ul><ul><ul><li>Types of 3PL </li></ul></ul><ul><ul><li>Standard 3PL provider </li></ul></ul><ul><ul><li>Service Developer </li></ul></ul><ul><ul><li>Customer Developer </li></ul></ul>
  15. 15. Logistics Outsourcing <ul><li>When Should 3PL Be Used? </li></ul><ul><li>Disadvantages </li></ul>
  16. 16. Logistics Outsourcing <ul><li>How To Do Logistic Outsourcing </li></ul><ul><li>Evaluate Corporate Strategy </li></ul><ul><li>Identify Hidden Costs </li></ul><ul><li>Identify Company’s Existing Resources </li></ul><ul><li>Recognize Timeframe </li></ul><ul><li>Request For Proposal (RFP) </li></ul><ul><li>Understand 3PL Providers </li></ul><ul><li>Measurement </li></ul>
  17. 17. Service Outsourcing “ If you don’t do it, you won’t live to compete”
  18. 18. Advantages of Service Outsourcing/off-shoring <ul><li>Reduce & Control The Operating Cost. </li></ul><ul><li>Gain Access To World-Class Capabilities. </li></ul><ul><li>Free Internal Resources For Other Purposes. </li></ul><ul><li>Gain Access To Preempt Resources. </li></ul><ul><li>Reduces & Helps Transfer Risks. </li></ul><ul><li>Handle Out Of Control Difficult Functions. </li></ul><ul><li>Helps Concentrate On Core Functions. </li></ul>
  19. 19. Disadvantages of Service Outsourcing/Off-shoring <ul><li>Operational Risks  Risks show up as slippages on time, cost and quality. </li></ul><ul><li>Strategic Risks  Risks are rooted in deliberate, opportunistic behavior by service providers or their employees. </li></ul><ul><li>Composite Risks  Risks are when a client company has outsourced a process for so long that it can no longer implement the process for itself. </li></ul>
  20. 20. Total Cost Of Outsourcing CPP = Cost Paid to Provider (money billed per hour) ABC = Additional Buyer Costs (expenses for a successful project) PAC = Performance Associated Costs (quality reliability etc.)
  21. 21. 5 Practices For Better Outsourcing <ul><li>Go Off-shore For The Right Reason </li></ul><ul><li>Choose Outsourcing Model Carefully </li></ul><ul><li>Get People On Board </li></ul><ul><li>Need To Invest Time & Effort </li></ul><ul><li>Treating Off-shore Partners As Equal </li></ul>
  22. 22. www.themegallery.com Outsourcing Chapter-2
  23. 23. Constraints Web 2.0 Change Outsourcing Chapter-2
  24. 24. 9 Critical Chapter-2 Outsourcing shifts From To Limited Access Virtually unlimited access to collective wisdom and market intelligence Procurement Relationship management as the Holy Grail Process People as the center of the outsourcing universe Mostly closed IP Mostly open IP/more sharing Low Price Best Value Static Dynamic, Actionable, interactive content and IP and data Hunting Shopping Betting Investing Medication Gratification
  25. 25. EFFECT OF WORLD OIL PRICE ON OUTSOURCING <ul><li>Constant Rise In World Oil Prices Since 2004 </li></ul><ul><li>Price Pushing Towards $150 Per Barrel </li></ul><ul><li>Effects Of World Oil On Companies Bottom Lines </li></ul><ul><li>Countries Where Outsourcing Is Headed </li></ul>
  26. 26. www.themegallery.com Thank You !