May 1, 2015
Introduction The idea of outsourcing is the contracting or subcontracting of activities to free up cash, personnel, time, and facilities for activities in which a company holds competitive advantage. In this paper the researcher will discuss and analyze the benefits/downsides of creating manufacturing operations outside the US. The researcher will discuss the topics of just in time manufacturing, strategic alliances, successful/unsuccessful outsourcing, companies and questions the researcher would ask an organization that was considering outsourcing.
What are the Advantages/Disadvantages of Just-in-Time Manufacturing?
According to Brasen (2013) just …show more content…
For example say Barnes and Noble receives some unwanted to press in the news. Due to the fact that Starbucks is known to work closely with Barnes and Nobles it is possible that Starbucks could receive some negative feedback from this situation. Starbucks is also not in charge of hiring employees that it has alliances with. If a PepsiCo employee does something wrong in the bottling process for Starbucks, they could still be held legally liable for the events that took …show more content…
IBM has been outsourcing for over 20 years on various different levels. For example according to the New York Post (2009) IBM currently is hiring more IT professionals over in India vs that of hiring in the United states. They have cut over 3,300 jobs in the last year because of pay scales. In India the average pay for an IT specialist is $17,000, compared with $100,000 for a senior IT specialist in the US (New York Post, 2009). That could save IBM 274 million dollars in this year alone. Outsourcing is not only successful for large corporations they can work for small businesses as well, for example Mark McRae has been able to operate over 30 businesses out of Australia (Wall Street, 2014). He was able to hire 1,300 employees and was able to make slightly over $280 million from both online and offline sales from his business. Mr. McRae would use production companies in areas such as the Philippines, South Africa, the US and Malaysia for production of his products. He would then in turn have the products shipped back to Australia so that they could be sold at local markets. The Wall Street Journal (2014) quoted McRae saying that “Outsourcing can give you access to a dizzying array of highly skilled professionals from all over the world. For example, to produce a professional documentary, I hired a script writer in the