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execution processes
Published in Peter W. Robertson, Supply Chain Analytics, 2020
Another important supplier analysis consideration is that of outsourcing. As the name implies, outsourcing involves the engagement of an external supplier to produce a product or service instead of producing it in-house. There are many reasons an organisation might want to outsource, the main ones being: Reduced costsCapital investment avoidanceReduces the outsourcing organisation’s management workload, enabling it to focus more intensely on its core competencies and the performance of its key business processesAccess to supplier-held process technology benefitsQuality improvementDelivery reliabilityFlexibility to changing market conditionsReduced SC lead-timeTwo important questions must be answered in regard to outsourcing: “Should we outsource this product/service?” and if yes: “Who should we outsource to?”
Procurement Management
Published in Gary L. Richardson, Brad M. Jackson, Project Management Theory and Practice, 2018
Gary L. Richardson, Brad M. Jackson
Outsourcing is an option that can be used to execute the procurement plan. It enables an organization to leverage the expertise of a contractor in procuring goods and services. It also transfers the risk of the procurement process to the contractor based on an agreement. Outsourcing helps to reduce overall cost of production for the organization and directly reducing time for the product delivery to the market. Outsourced contracts needs to be well managed to avoid delays that would impact the project delivery date, which could lead to increased overhead cost. However, some variances to the contract may occur on the part of the seller that will need to be addressed by the project team. For example, the outsourcing contractor for a services contract may not be delivering the right personnel for a project and the project team may have to work with the HR department to obtain some in-house resources to accommodate the gaps. Or the seller is not delivering goods according to the schedule, which may impact the overall project schedule. In this case, the project team will need to adjust their schedule, cost, and communication plans to accommodate the delays. Similarly, the risk that the seller may go bankrupt during a project thereby posing a threat to the supply of resources is something that may need to be put into consideration as part of the Risk Management process.
Outsourcing and Offshoring Software Life Cycle Activities
Published in Leanna Rierson, Developing Safety-Critical Software, 2017
“Sourcing refers to the act of transferring work, responsibilities, and decision rights to someone else” [1]. Outsourcing is the act of sourcing work to an outside organization; that is, to an external entity. Outsourcing software development and verification is not new, but it is definitely more prevalent now than in the past. There are many aspects to consider when outsourcing; however, it is not feasible to examine them all here. This chapter concentrates on outsourcing some or all of the safety-critical software development and verification to one or more teams. This chapter investigates why outsourcing is promoted, potential risks and challenges of outsourcing and offshoring, and recommendations for addressing the risks.
Selecting an optimal contractor for production outsourcing: a case study of gear grinding
Published in Journal of the Chinese Institute of Engineers, 2020
Kuen-Suan Chen, Tsang-Chuan Chang, Yi-Yu Guo
In today’s globally competitive industry environment, firms must adopt customer-oriented operational strategies and offer more diverse and customized products to satisfy customer needs, enhance their market competitiveness, and progress toward sustainable development. This means constantly improving technical capabilities and product quality, shortening manufacturing time, lowering costs and establishing flexible production procedures to swiftly deal with the product expectations and diverse needs of consumers. The outsourcing concept proposed by Prahalad and Hamel (1990) refers to the contracting of professional manufacturers for non-core and auxiliary functions to reduce operating costs and concentrate resources so that the firm can focus on its own core advantages. Outsourcing also enables firms to compensate for professional insufficiencies and improve their overall efficiency and competitiveness. Grossman and Helpman (2002) confirmed that by outsourcing production processes for which the firm’s capability is less cost-effective than more experienced manufacturers, firms can manufacture products with greater efficiency and flexibility and keep their focus on their core value. The use of outsourcing has become a business trend that enables firms to enhance their competitiveness and operating flexibility.
Risk management framework for outsourcing in the defence sector: a case from India
Published in International Journal of Production Research, 2019
Nilesh Perlekar, Jitesh J. Thakkar
This shows the manner or the way in which failure of process or operation takes place. Certainly the experience and expertise of team members are very important for such decisions which need to be taken during the FMEA study. Some of the key questions which are discussed during the group discussion for finalisation of list of risks and potential failure mode for the research are as follows: What are the main risks associated with outsourcing?What are the possible ways by which a specific risk can affect or interrupt the supply chain of outsourced operation?How the potential failure in outsourced activity can affect the production operation of the organisation?3rd column: potential effect of failure
A Study and Comparison of Shipment Policies with Repair Options in a Two-Tier Supply Chain Model
Published in Engineering Management Journal, 2021
Outsourcing is defined as an activity that “means handing over to a third-party management, for a required result, some or all of” a particular activity or related services (Willcocks et al., 1995). Over the past twenty years, different types of outsourcing have been tried by different organizations, depending on their perception of the best options for their context. Despite the diversity of interpretations of outsourcing, Franceschini et al. (2003) identified three general categories: 1) Traditional outsourcing, 2) Strategic outsourcing, and 3) Futuristic outsourcing.