Firm Alpha has manufactured its own products for years. Recently, however, one of these products has become more and more like a commodity. Several firms are now able to manufacturethis product at the same price and quality as Firm Alpha. However, they do not have firm Alpha’s brand name in the marketplace. Should Fiorm Alpha continue to manufacture this product or should it outsource it to one of these other firms?
2006-07-26 06:41:34 · 3 answers · asked by JCHERRIE48 1 in Business & Finance ➔ Other - Business & Finance
Outsourcing means Firm Alpha loses control on the quality of the product until it returns to their firm (I am assuming it comes back to then go to the customers). The firm has to ensure that they do not lose control of this process to the point that it becomes a problem that takes some work to correct.
Outsourcing can become expensive especially if the product is being returned to you and delays are taking place from the outsources, that you have no control over.
Overall, Firm Alpha has to really do some number crunching and determine the cost to manufacture on site and the cost to outsource elsewhere. If outsourcing is the answer on paper, in reality, the best company has to be chosen and then the best way to accomplish the outsourcing to everyone's advantage has to be reached.
If Firm Alpha wants the outsourcing to be a productive, profit generating option, the bottom line has to be examined carefully and then weighed heavily against the cons of the decision.
When they can't determine more cons than pros...ooutsourcing may very well be the best alternative. Look at the long term and manage the short term well.
2006-07-26 06:55:21 · answer #1 · answered by dustiiart 5 · 0⤊ 0⤋
Firstly, crunch the numbers and see if your company will benefit with outsourcing. More importantly, make sure that there facilities are safe. With all these wars going on in different countries, your computers may not be safe. If you are in the US, Level 3 (http://www.level3.com/) has some good facilities. If you need to outsource your EDI... http://www.dmovers.com/
2006-07-28 06:41:42 · answer #2 · answered by Steve B 3 · 0⤊ 0⤋
if you outsource, stay within your own country. Foreign outsourcing is costing American's to lose alot of jobs.
2006-07-26 06:45:29 · answer #3 · answered by t_von_cloedt 2 · 0⤊ 0⤋