What is Outsourcing and Offshoring - Daily Logistics


What is Outsourcing and Offshoring - Daily Logistics - read the full article about what is Business process outsourcing, BPO and Outsourcing from Daily Logistics on Qualified.One
Daily Logistics
Youtube Blogger

Welcome to daily logistics. in this video, we are going to talk about  Outsourcing and Offshoring.

without further due lets get started.

What is Outsourcing mean? Most people think outsourcing  and offshoring are the same.

Please know they are not the same.

In simple words outsourcing is the  process of hiring someone outside the company to do work on the company’s behalf.

Normally the hired party is an  expert on the dedicated job. A company can outsource any  function in the organization.

But it is important not to let the  outsourced party touch your core business.

Not only in the Logistics and supply chain, using outsourcing for traditionally  internally handled activities has become a practice to gain competitive  advantages by most of the organizations.

Sometimes you may come across some work  which is not the cup of tea of your company.

But they are important to keep  the business running and find very difficult to do within the organization.

So, you simply hire someone to do it.

For example, Almost all the companies hire  janitorial services and security firms.

It’s a simple example of outsourcing.

What are Outsourcing Companies? Any company/person providing facilities/services  for the activities outsourced by other companies.

These companies are experts in their business with the experience as they have  specialized in a particular field.

What are the Common Outsourced  Activities in Logistics? Warehousing, Transportation, Production, Marketing, Hiring employees.

What are the Benefits of Outsourcing? Can utilize the available resources within  the organization for the core activity.

Ability to focus more on the core activity as no  need to worry about the other business activities.

Gain the expertise knowledge and  technology to manage business activities.

Competitive advantage with reduced costs.

Cut down the internal staff as most  of the activities are outsourced.

What are the Disadvantages of Outsourcing? The business will depend on third-party  companies as they do most of the activities.

The threat of leaking business secrets.

The third-party company may manage the same  business activity of a few competitors.

There is a possibility of  a third-party company using the same promotional method to all the companies.

Customers may get dissatisfied and worry to buy products as the company itself  doesn’t produce the products.

Mistakes of the third-party company  over your product will be at your cost.

If defected products are released to  the market, your brand will be destroyed even the responsibility is  with the outsourced company.

What are Outsourcing and Offshoring? Offshoring is the concept of  companies conducting business activities outside of their origin country.

This is very famous nowadays to  gain from competitive advantage.

So, as explained earlier outsourcing is using a third-party company to  carry the business activities.

What is Offshore Vs Outsourcing? A company can conduct its business outside the  origin country by hiring a third-party company.

Here conducting the business outside the  origin country become “Offshoring” and using a third-party company to carry  out the business becomes “Outsourcing”.

Together this process  becomes offshore outsourcing.

What are the Examples of Offshore Outsourcing? One of the best examples of offshoring is  Nike. The leading producer in footwear, apparel, and accessories.

Nike uses offshoring outsourcing  for it’s all the activities to the different parties in the world  while only focusing on their core activity.

Nike uses their all available  resources for Nike products designing.

From the production,  transportation to distribution all the logistics activities are  handled by the offshoring companies.

Nike’s headquarter is in America,  offshoring companies are in more than 40 countries including  Vietnam, Sri Lanka, and China.

Apple Inc has the best supply chain  and leading the smartphone market.

Apple’s headquarters is in America. Yet they  have offshoring production plants in China.

thats it for this video.

if you like our content consider  subscribing to the channel.

thank you for watching.

see you in another video.

Daily Logistics: What is Outsourcing and Offshoring - Daily Logistics - BPO