Outsourcing – A Management Technique...

Outsourcing – A Management Technique   Outsourcing is a usual practice among different organizations and is a one of the element of the organizational strategy.  Most of the organizations these days outsource some of the functions they used to perform themselves. Outsourcing is when any operation or process that could be (or would usually be) performed in-house by the organizational employees is sub-contracted to another organization for a substantial period. The outsourced tasks can be performed on-site or off-site. By outsourcing, the organization uses third parties to perform noncore activities of the organization. Contracting third parties enables the organization to focus its efforts on its core competencies. Third parties that specialize in an activity are likely to be lower cost and more effective, given their focus and scale. Through outsourcing, the organization can access the state of the art in all of its operational activities without having to master each one internally. The concept of outsourcing came from the American terminology ‘outside resourcing’, meaning to get resources from the outside. The term was later used in the economic terminology to indicate the use of external sources by an organization for some of the activities in its functioning. As per James Brian Quinn of The Outsourcing Institute, outsourcing started with organizations outsourcing physical parts. Now the big shift has been to outsource intellectually based service activities like research, product development, logistics, human relations, accounting, legal work, marketing, logistics, and market research. If an organization is not best-in- world in doing something and is doing it in-house, then it is giving up the competitive edge. In such a case the organization can outsource to the best in the world, up the value, and lower the cost. There are three major categories of motivations for outsourcing namely...

Purchase Management

Purchase Management  Materials today are lifeblood of industry. They must be available at the proper time, in the proper quantity , at the proper place, and at the proper price. Purchasing is the function of buying materials and services from external sources in an organization. It is one of  the most critical functions as it provides the input materials to the organization for converting it into output products. Purchase management is the management of the purchase and procurement process and related aspects in the organization. Purchase department buys raw materials, equipment, spare parts, consumables, and services etc. as required by the organization and hence purchase department has a very important role in the functioning of the organization. Purchase activity is one of the most crucial activity in the organization and needs an effective management. It is the main activity in the area of material management. Often procurement and purchasing are used as synonym to each other. Procurement is used to define one of several supply functions involved in logistics activities. In the broadest sense procurement includes the entire process by which all classes of resources (people, materials, facilities and services) for the organization are obtained. Since purchasing is a unique function, it differs a bit from procurement in the sense that while procurement, with the same objective has a wider domain , purchasing with the same objective is included in it. In a manufacturing  organization, purchase is the first element which affects the product cost and hence has a big impact on the organizational profit. The organization needs an efficient and economic purchasing and procurement of its various supplies of materials from the suppliers. The purchase department which performs the function of purchasing and procurement of the materials is to function very efficiently. Purchasing is no doubt a vast and complex...

Supply Chain Management...

Supply Chain Management Supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chain management (SCM) is the management of the flow of materials, equipment, finances, information, and manpower resources within and among organizations to ensure the efficient and fast delivery of quality goods and services to the customer. It is the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging logistics, synchronizing supply with demand and measuring performance. It is the conscious effort of an organization towards active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. Different definitions of supply chain management which are commonly being used are given below. Supply chain strategies require a total systems view of the links in the chain that work together efficiently to create customer satisfaction at the end point of delivery to the consumer. As a consequence, costs get` lowered throughout the chain by driving out unnecessary expenses, movements, and handling. The main focus is turned to efficiency and added value or to the end user’s perception of value. Through the supply chain strategies efficiency is increased and bottlenecks are removed. The measurement of performance focuses on total system efficiency and the equitable monetary reward distribution to everyone within the supply chain. The supply chain system has to be responsive to customer requirements. The integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders. The management of upstream and downstream value added flows of materials, final goods, and related information among suppliers, organization, sellers,...