MGOC20H3 Lecture Notes - Lecture 8: Service Management, Strategic Planning, Operations Management
Document Summary
What is outsourcing: procuring from external suppliers service or products that are normally part of an organization, offshoring is moving processes to a foreign country but retaining control, extension of the long-standing practice of subcontracting. Outsourcing has become a major strategy as firms move toward specialization: increasing expertise, reduced cost of reliable transportation, rapid deployment of advancements in telecommunications and computers. Examples of outsourcing: call centres for brazil in angola, legal and finance service in the philippines. Ibm providing travel and payroll for p&g: adp processing payroll for thousands of firms, blue cross sending patients to india. Advantages & disadvantages of outsourcing: cost savings, gaining outside experience. Improving operations and service: focusing on core competencies. Outsourcing brings other issues: employment may need to lay off some of your workforce, changes in facilities and processes needed to receive components in a different state of assembly, vastly expanded logistics issues.
