It is termed as a complex connection of businesses where there is transfer of products from one to another. An organization with a strong supply chain network optimization will be able to deal with changes in demand, price pressures, and also increase in the number of customers. One with a weaker system will have to upgrade to a newer efficient system or be forced to face the penalties. A company may have any of the following strategies outsourcing, off-shore plants, and also manufacturing of products at its mother country.
Companies that decide to outsource shift costs to the contractor. They will advertise tenders and finally award them to those who qualify. The contractor will take the risk of producing and transporting the goods to the point where they will be utilized. The products will be examined upon delivery and if they are of required quality can be accepted.
The business should consider various factors when it has decided to outsource. It should evaluate the performance of the contractor. Nowadays, businesses have no time and resources to do rework on products. The contractor should offer good products and that are of the right grade. It should also consider his compliance with regard to time; he should avail the goods in good time otherwise it would cost the business its reputation or worse being sued in court.
Investing in other countries may be a beneficial move. A company may want to have its base of operations close to the source of raw materials in order to reduce the cost of transporting such to their plants. Moreover, there may be a cheap source of labor and with the required skills. These two factors would help increase production tremendously.
Despite the benefits of having off-shore industries, it also has its challenges. The factor of quality is put in question. Whether the products in the two countries would be similar? The answer is no, since off-shore industries are affected by cultural values and language. Therefore, such companies are at a higher risk of compromising their quality than others.
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.
Companies that decide to outsource shift costs to the contractor. They will advertise tenders and finally award them to those who qualify. The contractor will take the risk of producing and transporting the goods to the point where they will be utilized. The products will be examined upon delivery and if they are of required quality can be accepted.
The business should consider various factors when it has decided to outsource. It should evaluate the performance of the contractor. Nowadays, businesses have no time and resources to do rework on products. The contractor should offer good products and that are of the right grade. It should also consider his compliance with regard to time; he should avail the goods in good time otherwise it would cost the business its reputation or worse being sued in court.
Investing in other countries may be a beneficial move. A company may want to have its base of operations close to the source of raw materials in order to reduce the cost of transporting such to their plants. Moreover, there may be a cheap source of labor and with the required skills. These two factors would help increase production tremendously.
Despite the benefits of having off-shore industries, it also has its challenges. The factor of quality is put in question. Whether the products in the two countries would be similar? The answer is no, since off-shore industries are affected by cultural values and language. Therefore, such companies are at a higher risk of compromising their quality than others.
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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