What is outsourcing? Outsourcing has traditionally referred to the delegation of a firm’s responsibilities, such as manufacturing and administrative tasks, to an outside third party. In recent years, the definition of outsourcing has expanded, and companies have increasingly utilized entities located overseas to meet their outsourcing needs.
Reasons for outsourcing: Outsourcing enables individuals and companies to delegate repetitive or unfamiliar tasks so they can concentrate on their core business. It also enables them to access labor sources, resources, technology and ideas they would not normally have access to. This process can greatly aid in specialization and efficiency as well as allowing work to be performed in the most cost-efficient manner and at the most suitable location.
For example, high-technology production is concentrated in places like the Silicon Valley where the appropriate people, technology and infrastructure have been established. Likewise, textile manufacturing is concentrated in areas of China where suitable conditions make these areas ideal for textile production.
By allowing individuals, companies and countries to concentrate and specialize on what they do best, outsourcing can be a win-win situation.
The challenges of outsourcing overseas: There are many advantages to outsourcing manufacturing overseas, however, it can also result in various challenges. While a nation may offer the best labor force and resources to produce a particular product, differences in culture, business practices and quality standards create obstacles. At Manufacturing Sourcing, we provide the expertise and resources to ensure a smooth, seamless process when companies outsource the manufacture of their goods. Products are manufactured at efficient, effective factories with excellent quality control. Furthermore, our clients do not encounter language and cultural issues since these are handled by our qualified staff.
Currency fluctuation and outsourcing: Currency fluctuation is another factor in overseas outsourcing. Increases or decreases of a country’s currency will increase or decrease its purchasing power. Since our pricing is almost always set in US dollars or currencies pegged to the US dollar, fluctuations in currency values will not immediately affect those who purchase in US dollars or those whose national currency tracks closely to the US dollar. However, those who do not purchase in US dollars may see the amount they pay fluctuate depending on the value of their country’s currency vs. the US dollar.
Lean manufacturing: Lean manufacturing is a philosophy of production that emphasizes efficiency and strives to eliminate waste from the manufacturing process while improving quality. This is done by continuously looking for ways to reduce inventories and the amount of labor and resources required to produce a product. Lean manufacturing originated in the Toyota Production System and in recent years, the practice of lean manufacturing has spread across the globe. Lean manufacturing principles are utilized in the manufacturing facilities selected by Manufacturing Sourcing to produce your products. Lean manufacturing practices will assist you in obtaining better products at lower prices.
Outsourcing will continue to expand as modern communication and transportation systems shrink the world we live in and business becomes increasingly competitive. Outsourcing will provide your business with additional opportunities to grow and prosper.