MNO2601
ASSIGNMENT 6
SEMESTER 2
2022
1.1. What is outsourcing?
, Outsourcing is a business practice in which a company hires a third-party to
perform tasks, handle operations or provide services for the company. The
practice of contracting out to a supplier work previously done within the
operation.
An example is when ABC Ltd order readily manufactured valves from an
external entity.
Question 1.2
In house outsourcing
The origins of any quality problems Supplier may have specialized
are usually easier to trace in-house knowledge and more experience,
and improvement can be more also may be motivated through
immediate but there can be some risk market pressures, but
of complacency. communication
more diffificult.
Can mean synchronized schedules Speed of response can be built into
which speeds throughput of materials the supply contract where
and information, but if the operation commercial pressures will encourage
has external customers, internal good performance, but there may be
customers may be low-priority. signifificant transport/delivery delays
Easier communications can help Late-delivery penalties in the supply
dependability, but, if the operation contract can encourage good
also has external customers, internal delivery performance, but
customers may receive low priority organizational barriers may inhibit in
communication
Closeness to the real needs of a Outsource suppliers may be larger
business can alert the in-house with wider capabilities than in-house
operation to required suppliers and have more ability to
changes, but the ability to respond respond to changes, but may
may be limited by the scale and scope have to balance conflflicting needs of
of internal operations different customers.
In-house operations do not have to Probably the main reason why
make the margin required by outside outsourcing is so popular.
suppliers so the business can capture Outsourced companies can achieve
the profifits which would otherwise be economies of scale and they are
given to the supplier, but relatively motivated to reduce their own costs
low volumes may mean that it is because it directly impacts on their
diffificult to gain economies of scale or profifits, but costs of communication
ASSIGNMENT 6
SEMESTER 2
2022
1.1. What is outsourcing?
, Outsourcing is a business practice in which a company hires a third-party to
perform tasks, handle operations or provide services for the company. The
practice of contracting out to a supplier work previously done within the
operation.
An example is when ABC Ltd order readily manufactured valves from an
external entity.
Question 1.2
In house outsourcing
The origins of any quality problems Supplier may have specialized
are usually easier to trace in-house knowledge and more experience,
and improvement can be more also may be motivated through
immediate but there can be some risk market pressures, but
of complacency. communication
more diffificult.
Can mean synchronized schedules Speed of response can be built into
which speeds throughput of materials the supply contract where
and information, but if the operation commercial pressures will encourage
has external customers, internal good performance, but there may be
customers may be low-priority. signifificant transport/delivery delays
Easier communications can help Late-delivery penalties in the supply
dependability, but, if the operation contract can encourage good
also has external customers, internal delivery performance, but
customers may receive low priority organizational barriers may inhibit in
communication
Closeness to the real needs of a Outsource suppliers may be larger
business can alert the in-house with wider capabilities than in-house
operation to required suppliers and have more ability to
changes, but the ability to respond respond to changes, but may
may be limited by the scale and scope have to balance conflflicting needs of
of internal operations different customers.
In-house operations do not have to Probably the main reason why
make the margin required by outside outsourcing is so popular.
suppliers so the business can capture Outsourced companies can achieve
the profifits which would otherwise be economies of scale and they are
given to the supplier, but relatively motivated to reduce their own costs
low volumes may mean that it is because it directly impacts on their
diffificult to gain economies of scale or profifits, but costs of communication
