To Evaluate the Effectiveness of Strategic Outsourcing to Strategic Sourcing in Small Manufacturing Sector
Keywords:
Strategic sourcing, Strategic outsourcing, Manufacturing Raw-MaterialAbstract
Procurement in 2020 will look different than it does today. In future new concepts will alter existing assumptions and introduce new thinking beyond purchasing raw-material. It will require additional skills, knowledge and tools to address new challenges while solving current ones more creatively. And it will likely change the very core of how companies look at procurement as an organisatioanl function and an overall company competence.
When we analyse the present economic scenario with the global competition and the thrust to reduce the manufacturing cost & overheads of any manufacturing company in order to survive make anyone think of bringing immediate change in manufacturing sector by concentrating on the biggest cost contributor in any product which is raw-material and its procurement strategy. This research paper evaluates the effectiveness of Strategic Outsourcing compared to presently followed Strategic Sourcing in manufacturing sector.
The main concept here is that instead of procuring raw-material, maintaining Inventory than off-loading for manufacturing which adds up purchase cost, Inventory cost, manpower, infrastructure, machines, tools, Jigs & fixtures, companies need to go for Strategic Outsourcing. The change by going for strategic outsourcing and reducing number of Suppliers by procuring the sub-assemblies or partly processed goods will reduce the product cost significantly. It is observed that many countries have taken advantage of Strategic outsourcing except in India.in this situation, we felt a research is required to evaluate the effectiveness of Outsourcing.
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