Companies outsource for several reasons, First they do not want to invest in assets that they cannot keep efficiently employed, Second they don't have the core competency to do the work at their cost target. Third, they need additional capacity.
Companies off shore as a form of labor arbitrage or to save logistics costs and get closer to their customers, or to deal with currency abd balance of trade issues,
Since the world is a dynamic place and these factors are always changing, we can exect that offshoring and outsourcng will ebb and flow in response to the changng factors and the expense and difficulty involved in moving manufacturing locations.
Nimantha, I agree about the risk part. But the same risk can be from inside the company also. In every company there are a certain percentage of employees which will do all sort of such things like stealing datas, technology, design etc. So there is no guarantee that we can safe guard our technology or datas, but obliviously in house works are much safer when compare with outsourced works.
Well I think its not loosing as such but things are becoming a bit more commercialized where the original outsourcing has been changed dramatically. That may be the reason where you get lots of support services charging hugh amounts which makes companies to feel that outsourcing is not that worthy as it was sometime back.
Jacob true you have a point but you still have the risk of loosing data and also keep in mind that if the 3rd party company knows that this is a short term project they might try to get it indirectly. That is a risk which has to be handled with care.
Nimantha, if my requirement is for a short while, then why should I have to take the pain? Recruiting an employee is a lengthy process. I have to advertise for the post, call them for interview, after appointing I have to fix a salary along with other benefits and perks, allocating resources for work,…. etc. if am outsourcing the same job, I have to pay only for the work done. That’s the main reason behind outsourcing.
Nimantha.d: The particular customer I had, initially, been referring to only outsourced to someone they had completely trusted, because they had used them in the past for overflow. It was, also, kept in the US (even local), which is, of course, the only way it should be done. If there is a particular piece of a job that isn't done frequently enough to justify keeping someone in-house on a full-time basis, I don't begrugde these companies for using an outside company. If the numbers say it doesn't make sense, then it doesn't make sense. If they do a particular job on a regular basis, then it would make sense to have someone in-house to do it for them. All manufacturers are looking to do the best job for their customers, but they also need to do what's best for them, financially, otherwise they won't stay in business, hence, no more customers.
Well Jacob just because yo do not have any resources to make your systems work as you would like to ,outsourcing is not the key. I feel you should hire employees who has he skill and then do it in-house. That way you can expand your business plus has a gurantee that the data will be in safe hands.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.