Offshoring Production

Paper Summary:

This paper explains that the needs to finding a competitive advantage through better process management and to increasing operations management efficiencies are catalysts driving companies globally to seek out offshore outsourcing partners. The author points out the benefits, which have made offshoring increasingly critical to a company's strategic plan. However, there are major impediments to implementing offshoring and outsourcing strategies, which include the clash of cultures between the outsourcer and its offshore partner, the lack of consistency in how each view time as a resource, and the lack of consistency in terms of quality standards. The paper offers guidelines for managing this strategy and business examples.

Table of Contents:
Introduction
Offshoring has Progressed Past Cost Reduction
Strategic Use of Offshore Outsourcing for Project-Based Programs
Comparing Offshoring Delivery Models
Evaluating Factors for Defining an Offshore Model
Advantages and Disadvantages of Offshore Outsourcing
Conclusion

From the Paper:

"The primary motivation for many companies to offshore production and services or both is the ability to significantly drive down their wage costs, yet there are also the process costs that can also be significantly reduced. Take for example the direction of Infosys to offer outsourcing services for industrial manufacturers' order management systems, a task so critical to the overall functioning of a company, and yet Infosys is getting new clients throughout the rust-belt region of the US, in traditional industrial manufacturers."

Sample of Sources Used:

• Stefan Bock (2008). Supporting offshoring and nearshoring decisions for mass customization manufacturing processes. European Journal of Operational Research, 184(2), 490. Retrieved May 1, 2008, from ABI/INFORM Global database. (Document ID: 1338230621).
• O Zeynep Aksin, Andrea Masini. (2008). Effective strategies for internal outsourcing and offshoring of business services: An empirical investigation. Journal of Operations Management, 26(2), 239. Retrieved April 26, 2008, from ABI/INFORM Global database. (Document ID: 1431420421).
• Amar Gupta, Satwik Seshasai, Sourav Mukherji, Auroop Ganguly. (2007). Offshoring: The Transition from Economic Drivers Toward Strategic Global Partnership and 24-Hour Knowledge Factory. Journal of Electronic Commerce in Organizations, 5(2), 1-23. Retrieved April 29, 2008, from ABI/INFORM Global database. (Document ID: 1205735631).
• Mike Ledyard, Bill Keough. (2007, July). Demand-Driven Supply Chain Meets Offshoring. Supply Chain Management Review, 11(5), 11. Retrieved May 1, 2008, from ABI/INFORM Global database. (Document ID: 1330251151).
• Frederic Robert-Nicoud (2008). Offshoring of routine tasks and (de)industrialisation: Threat or opportunity--And for whom? Journal of Urban Economics, 63(2), 517-535. Retrieved April 28, 2008, from ABI/INFORM Global database. (Document ID: 1429397081).

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