Supply chain network involves a link of businesses that focus on moving products from the source to where they will be utilized. A business will want to create a strong and efficient supply chain network optimization if it is going to grow and make profits. It may decide to outsource, have off-shore industries, or manufacture products from its own premises. Whichever the choice it will be focused on solely on reducing production costs, increasing returns, and improving its reputation.
Outsourcing is the act of giving a certain service to another company. This is done because it is economical and saves the firm the trouble of doing so. If the service is carried out by the original company, it may become expensive or provide complications due to many activities involved. This would affect the operations of the firm negatively; hence, should be avoided.
The compliance and performance of the contractor is important. He should observe time while delivering the goods since the company has many customers to serve and who need not be late. If they are not served on time, they may get fed up and search for another company that offers the same products. The goods should be effective and efficient since they are paid for and to ensure the name of the firm is not ruined.
Having off-shore plant is another way. A company may opt to move its operations to overseas countries depending on various factors. It may want to reduce the cost of buying raw materials, training labor, and tax factors. This would help increase more returns, which would not be possible in the mother country.
Apart from the benefits, the company should also consider its risks. Off-shoring operations does not guarantee uniformity of products in the new country and that of origin of the firm. This is mainly affected by culture and language. The beliefs of one group are different with that of another. For instance, one may believe in hard work and living in honesty while another may not. In addition to that, if there is use of different languages people may not understand one another; hence, confusion.
The team may also decide to pick running of local industries. Here they will be able to monitor and consider the production process. This is because it will be internal and it shall be handled by one of their own employees. He will answer for any mistake made and also understand the goals of a company; thus, working hard will ensure he gets a promotion.
Despite the assurance in quality, this policy may prove relatively expensive. This is because they have to locate the raw materials and transport them to the factory. They also have to train workers on how to operate machines bought. The machines are expensive depending on use and size and may not be affordable to the organization; hence, forcing them to employ other means of obtaining the products.
Moreover, companies should not only consider cost and making profits, but also the impact of their products on people. Producing cheap products that are harmful shows lack of ethics and good morality. This also ruins their good reputation and customers will lack faith in them.
Outsourcing is the act of giving a certain service to another company. This is done because it is economical and saves the firm the trouble of doing so. If the service is carried out by the original company, it may become expensive or provide complications due to many activities involved. This would affect the operations of the firm negatively; hence, should be avoided.
The compliance and performance of the contractor is important. He should observe time while delivering the goods since the company has many customers to serve and who need not be late. If they are not served on time, they may get fed up and search for another company that offers the same products. The goods should be effective and efficient since they are paid for and to ensure the name of the firm is not ruined.
Having off-shore plant is another way. A company may opt to move its operations to overseas countries depending on various factors. It may want to reduce the cost of buying raw materials, training labor, and tax factors. This would help increase more returns, which would not be possible in the mother country.
Apart from the benefits, the company should also consider its risks. Off-shoring operations does not guarantee uniformity of products in the new country and that of origin of the firm. This is mainly affected by culture and language. The beliefs of one group are different with that of another. For instance, one may believe in hard work and living in honesty while another may not. In addition to that, if there is use of different languages people may not understand one another; hence, confusion.
The team may also decide to pick running of local industries. Here they will be able to monitor and consider the production process. This is because it will be internal and it shall be handled by one of their own employees. He will answer for any mistake made and also understand the goals of a company; thus, working hard will ensure he gets a promotion.
Despite the assurance in quality, this policy may prove relatively expensive. This is because they have to locate the raw materials and transport them to the factory. They also have to train workers on how to operate machines bought. The machines are expensive depending on use and size and may not be affordable to the organization; hence, forcing them to employ other means of obtaining the products.
Moreover, companies should not only consider cost and making profits, but also the impact of their products on people. Producing cheap products that are harmful shows lack of ethics and good morality. This also ruins their good reputation and customers will lack faith in them.
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