Outsource Production

Over the years this has been a very hard question to answer whether a manufacturing

firm needs to produce itself or it needs to outsource the production. The core benefit of outsourcing is that a firm can concentrate solely on its main service or product and the rest will be looked after by the outsourcing firm. The outsourcing concept is not a new one; people usually outsource what they think they cannot do on their own due to any reason. The reason why outsource production has gained popularity is its raise in standards. Today outsourcing firms play on three prime factors that to need to consider the most before you select any of your option. The firms offer quick services, higher standards and inexpensive rates.

Even if in a case you are offered a low cost of production with quicker service time than what you might incur, there are still several aspects that need to be considered thoroughly while taking this make or buy decision' firstly you need to analyze what part(s) of the firm you are intending to outsource. This is very important because if you are having any distinction in any product or service, you really should not opt to outsource the production for that product, because this might prove to lower your standards or might result in changing your point of difference. Secondly if you are a production firm of a bicycle then idea to outsource the whole production process of bicycle is not a good one. Rather you can either outsource the production of wheels or the painting phase, so that you can solely concentrate on your bicycle production.

Whenever you decide to go for outsource production of a specific part of production the factors that needs to be considered are follows

Continuity and control of Supply you need to make sure that the firm you are outsourcing your production is capable of producing more than what your demand is, if this is not the case then the out of stock situation might occur which can degrade your brand image.

Reliability of the outsource firm reliability is very important since you are supposed to choose a firm that is better and quicker than you, therefore it has to be reliable on the long term basis so that you can freely concentrate on your core production.

Alternate supplier this is another important aspect, because if an alternate supplier or alternate outsourcing firm is available this will avoid the chance of any monopoly in future.

Social and legal factors the Governmental and legal factors are also important since if you already have promise your stakeholders to work solely by yourself this outsource production decision might violate the terms and you can lose trust.

The decision of outsource production varies with situations and nature of production but still if all the parameters are considered thoroughly, and you are sure about your requirements this will really benefit you for future productions as well.

Outsource Production

By: Maria Iqbal

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