4- Outsourcing

What is outsourcing?

The practice of hiring an external company to handle specific business tasks or functions, often to reduce costs and leverage specialised skills.

Why do companies outsource?

• Reduce cost

• Focus on core competencies

• Solve capacity issues

• Gain access to specialized expertise

How to implement outsourcing?

Discovery → Contract Finalization → Implementation → Sustained phase

When should companies outsource?

• When they lack internal experience

• When an external suppliers know-how is superior

• When buying is cheaper than making

What are various problems with outsourcing?

• Loss of control

• Loss of critical skills

• Security or confidentiality issues

• Poor communication

• Negative impact on employee morale

List down various reasons to outsourcing logistics

• Cost saving

• Risk management

• Dedicated logistics support

• Innovative tech

• Global network access