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Outsourcing - Coggle Diagram
Outsourcing
Reduce costs
For
Purchase price
Labour costs
Against
Transport
Quality impact?
Product availability
Emergency orders
Innovation
Utilise specialist knowledge
Utilise specialist technologies
Improve focus
Reduced management
No production
Directly employ specialists
Do what you are good at
Skill availability
E.g. India
IT specialists
For
Highly skilled
Technology allows access
Against
Culture
Language
Time zones
Expectations
Service
E.g. Phillipines
Increase variable cost
Lower fixed costs
Lower purchase price
Results in more money available
Reliability?
Supplier loyalty?
Increase revenue
Focus
Maximising profit
Conserve capital
Wage expense lower
Improve quality
Supplier dependent