subject: Reasons To Outsource Production [print this page] Todays market is a product of struggle and survival phases promoted by chaotic economic conditions. The market is ever changing and no future condition will ever look like anything from the past. Todays competition is influenced more by speed, pushing companies to innovate and adjust faster. Consequently, production outsourcing became a trend, if not a must.
To construct facilities and commence operations at other countries is a form of outsourcing. At the core of it all, the real reason why companies outsource is because they want to survive, if not get ahead of the game. But why outsource? Isnt it that the internet has fixed a lot of companys logistic problems, thus cutting a lot on their expenses? Cant companies find what they need in their own America? The answer is of course, they can, its just that the perks are irresistible abroad.
The most important reason would be cost. Construction and a piece of land where facilities can stand are cheaper at some other nations. Certain raw materials are more abundant, thus cheaper when harvested on site. Also, labor is cheaper abroad. That other country would be chosen strategically to meet the required high quality of input and output at a low production cost.
Another apparent reason would be the amount of attention or focus companies are able to distribute. That is why call centers are heavily outsourced in Asia. Some companies dont find it economical to focus their efforts on new endeavors when they got a hot business going on. Production outsourced is a kind of production that does not disturb a companys regular operations and schedule.
To improve the quality of products or services is another one of the most important reasons to engage in production outsourcing. It is relevant to the second reason focus. Many companies realize that the job of researching, improving, marketing, and maintaining the quality of a, take note, new product, is not anymore within their capabilities. Thats why 3rd party outsourcing companies come in handy.
Expertise is also an important reason to outsource. Some other foreign cultures allow foreign employees to perfectly fit in a kind of production that some companies dont find the time to study about. Production outsourcing has opened a lot of jobs worldwide, upped the speed of innovation of products, methods and services, and opened to the world some competitive edge that under-noticed cultures possess.
