Supply chain management Essay

In general, the outsourcing is hiring the foreign workers/company to do a particular task, as opposed to hiring domestic workers/company. Besides the outsourcing, the international purchase is an essential activity of companies. In the trend of a booming global economy, a company only focuses on its core value and hire suppliers to supply the necessary product and service. The relationship between companies are complicated and interdependent.

It also requires more of an investment and commitment by the international company which creates a higher risk. There is also the down side of having difficulty managing local resources.

Cost Advantage: The job can be completed at a lower cost than the company may incur and with better quality at the same time. For example, the wages in India is a fraction of the same work done in other western countries. The cost savings is approximately 60 percent when outsource in India. In addition, the higher quality service ensures the company benefits from the high quality work can be done at a low price.

“Global sourcing is defined as sourcing the technology, materials and components from sites and supplies located throughout the world. It also means the integration and coordination of requirements across worldwide business units” (Monczka & Trent, 1991, pp2-7).

Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay

Outsourcing is a method used by many corporations in which their products are manufactured in foreign countries often for cheaper labor.This method method of productions has it’s pros and cons.

In today’s business world, production cost was an increasing concern for companies working to stay competitive in the global marketplace. The top management must search for a global solution to drive down costs and reduce difficult activities associate with inventory management and production management. Global sourcing aimed to exploit global efficiencies in the delivery of services and goods across geopolitical boundaries, including low cost skilled labor, low cost raw materials, tax benefits, and price breaks. Whelan Pharmaceutical was the best example to illustrate how the company chose the best manufacturing site for global sourcing from different perspectives.

There are many benefits of outsourcing that companies and countries seize to take advantage of. The biggest benefit is reduced costs of infrastructure and labor. According to the OneNeck IT Solutions, “The attraction to overseas outsourcing has traditionally been reduced costs. By moving support services to India or China, for

There are obviously many ways in which products make it to us. To get materials from overseas obviously requires ships or aircraft.

Implement extensive research to predict possibility of economical, cultural or financial complications in the outsourcing country. Make economical/political stability one of the factors in the evaluation process as well as tariffs, customs, and insurance.

Even though some foreign vehicles have a cheaper listed price, foreign competition cannot compare to the long-range savings that a person will ensue (Keiling). What are some of the hidden costs found in foreign vehicles? With all cars, they will break down at some point, but one of the many problems with foreign vehicles is that when they break down, it will cost. The cost of repairs is usually higher in foreign vehicles rather than domestic (Keiling). Special knowledge must be known to fix a foreign vehicle, and finding a dealership that knows this knowledge is a rare (Cooper). Then someone must look at the availability of parts. Here in America, domestic parts are easy to come by, just go to any Advance Auto and they will most likely have an exuberant list of parts to choose from. The same cannot be said for foreign vehicles, as finding parts for a foreign-made vehicle can lead to a long and expensive search

There are many costs involved in internalization. These costs can be communication costs due to cultural differences, costs due to legal systems of the country which favors the local companies.

Labor costs in the United States are much higher than in many parts of the world. Consequently, the costs of production for labor-intensive manufacturing can be significantly reduced by moving factories overseas mainly to third world countries this is a common practice of Nike who outsource there manufacturing to other companies in countries such as Thailand and Indonesia.[ ]

Import duties can have an adverse effect on the end cost to the customer so these need to be taken in to account when presenting any quotes or tenders for work. The country of origin can be an issue with some of our customers as on occasion there has been expressed a reticence to trade with Indian produced products. The WTO and WCO guidelines and agreements on Rules of Origin allow us to move forward with contracts by dual production, this enables the company to produce products to a certain state of completion in India, then import to the UK branch and finish production giving the component a UK origin. Knowledge of the rules of origin agreed by the WTO alongside any Free Trade or Regional Trade agreements is necessary to evaluate the required work or percentage increase in value, or significant change in appearance to change the commodity code to enable this to be possible.

There are also several disadvantages to outsourcing agreements, which include becoming dependent on an outside supplier for services, failing to realize the purported cost savings from outsourcing, locking into a negative relationship, losing control over critical functions, and lowering the morale of permanent employees.