It is termed as a complex connection of businesses where there is transfer of products from one to another. An organization with a strong supply chain network optimization will be able to deal with changes in demand, price pressures, and also increase in the number of customers. One with a weaker system will have to upgrade to a newer efficient system or be forced to face the penalties. A company may have any of the following strategies outsourcing, off-shore plants, and also manufacturing of products at its mother country.
Companies that decide to outsource shift costs to the contractor. They will advertise tenders and finally award them to those who qualify. The contractor will take the risk of producing and transporting the goods to the point where they will be utilized. The products will be examined upon delivery and if they are of required quality can be accepted.
The business should consider various factors when it has decided to outsource. It should evaluate the performance of the contractor. Nowadays, businesses have no time and resources to do rework on products. The contractor should offer good products and that are of the right grade. It should also consider his compliance with regard to time; he should avail the goods in good time otherwise it would cost the business its reputation or worse being sued in court.
Allowing your company to expand to overseas countries is also important. These enables the organization to build up a larger market and create a good name for itself. It will enhance development by employing the citizens of that particular country thus higher standards of living. It will also increase the revenue since its paying taxes. Due to its large operations, it may get tax incentives and holidays that will reduce its expenses.
Despite the benefits of having off-shore industries, it also has its challenges. The factor of quality is put in question. Whether the products in the two countries would be similar? The answer is no, since off-shore industries are affected by cultural values and language. Therefore, such companies are at a higher risk of compromising their quality than others.
Goods may also be manufactured at the headquarters of the organization. This will be in its country of origin. The company is able to control the output most especially the quality since they are able to oversee the production process. They are also able to train employees up to the level they want and ensure there is no compromise in quality of products.
Despite the assurance in quality, this policy may prove relatively expensive. This is because they have to locate the raw materials and transport them to the factory. They also have to train workers on how to operate machines bought. The machines are expensive depending on use and size and may not be affordable to the organization; hence, forcing them to employ other means of obtaining the products.
Moreover, companies should not only consider cost and making profits, but also the impact of their products on people. Producing cheap products that are harmful shows lack of ethics and good morality. This also ruins their good reputation and customers will lack faith in them.
Companies that decide to outsource shift costs to the contractor. They will advertise tenders and finally award them to those who qualify. The contractor will take the risk of producing and transporting the goods to the point where they will be utilized. The products will be examined upon delivery and if they are of required quality can be accepted.
The business should consider various factors when it has decided to outsource. It should evaluate the performance of the contractor. Nowadays, businesses have no time and resources to do rework on products. The contractor should offer good products and that are of the right grade. It should also consider his compliance with regard to time; he should avail the goods in good time otherwise it would cost the business its reputation or worse being sued in court.
Allowing your company to expand to overseas countries is also important. These enables the organization to build up a larger market and create a good name for itself. It will enhance development by employing the citizens of that particular country thus higher standards of living. It will also increase the revenue since its paying taxes. Due to its large operations, it may get tax incentives and holidays that will reduce its expenses.
Despite the benefits of having off-shore industries, it also has its challenges. The factor of quality is put in question. Whether the products in the two countries would be similar? The answer is no, since off-shore industries are affected by cultural values and language. Therefore, such companies are at a higher risk of compromising their quality than others.
Goods may also be manufactured at the headquarters of the organization. This will be in its country of origin. The company is able to control the output most especially the quality since they are able to oversee the production process. They are also able to train employees up to the level they want and ensure there is no compromise in quality of products.
Despite the assurance in quality, this policy may prove relatively expensive. This is because they have to locate the raw materials and transport them to the factory. They also have to train workers on how to operate machines bought. The machines are expensive depending on use and size and may not be affordable to the organization; hence, forcing them to employ other means of obtaining the products.
Moreover, companies should not only consider cost and making profits, but also the impact of their products on people. Producing cheap products that are harmful shows lack of ethics and good morality. This also ruins their good reputation and customers will lack faith in them.
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