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

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

Why do Companies Outsource?

Pros and Cons of Outsourcing

Cons:

• Difficulty in protecting confidentiality

• Potential security problems

• Disruption of supplies

• Low product quality and slow time to market

What is Global Supply Chain Management ?

Historical developments:

Creation Era Integration Era Globalization

Main players:

• Outsourcing, Re-shoring, and Near-Shoring

• Where and whom to source

• Ensure Safety and maintaining Quality

Managing SCM: Challenges

Transportation

Govt. regulation and restriction

Technology

Safety and Quality

• 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

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

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

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

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 !