Outsourcing

1. TO BE MADE HERE, OR ELSEWHERE –
A LOOK INSIDE OUTSOURCING DECISIONS

2. What is Outsourcing
• Outsourcing -
– “the strategic use of outside resources to perform
activities traditionally handled by internal staff and
resources” Dave Griffiths
• “The important thing about outsourcing or global sourcing, is that it
becomes a very powerful tool to leverage talent, improve productivity
and reduce work cycles.”
• Azim Premji

3. Why do Companies Outsource?

4. Pros and Cons of Outsourcing
Cons:
• Difficulty in protecting
confidentiality
• Potential security problems
• Disruption of supplies
• Low product quality and
slow time to market

5. What is Global Supply Chain Management ?
 Historical developments:
 Creation Era
 Integration Era
 Globalization
 Main players:

6. • Outsourcing, Re-shoring, and Near-Shoring
• Where and whom to source
• Ensure Safety and maintaining Quality

7. Managing SCM: Challenges
 Transportation
 Govt. regulation and restriction
 Technology
 Safety and Quality

8. • American multinational corporation
• In-depth research into customer and environment
• Reduced 75% to 25% of its production
• Well Choreographed logistics
• Increasing Efficiency
• 787 Dreamliner problem
• Quality Control measures

9. Worlds 4th Largest IT service provider, 1st in Japan
 It’s major suppliers Intel and AMD offshored to China
 Fujitsu has opted for a "virtual global SCM" (supply chain management
system) to decide who will make and deliver products.
 Competitive price advantage

10.  Nissan Motor Corporation is a Japanese
multinational automobile manufacturer
headquartered in Nishi-ku, Yokohama, Japan.
 Nissan Motor Corporation sells its cars under
the Nissan, Infiniti, Datsun, and NISMO
brands
 Nissan's supply chain, has been transformed by
globalization and the emergence of newly affluent markets
outside of North America, Europe and Japan

11.  A Japanese Electronics & Semi – Conductor Company
 Earlier a leader in circuit industry but now 3rd in the world
 Requires Reliability & Quality
 On-shore Sourcing and global R&D
 Issues:
IP Protection
Geographical Location

12. Conclusion
Companies
have to
outsource to
gain cost
advantage from
competitors
Cant deny
growing
markets
Once you open
the door for
outsourcing, it
can never be
closed
Constant
innovation
required
No way out now !