Outsourcing a source to create a competitive advantage

U.S. can learn from German and Japanese. In mid-1980, German
industry lost its cost advantage and its high value and production capacity could not
even stop the flow of jobs offshore. The same scenario was repeated in
Japanese business scene in 1980. The escalation of rocket high Japanese yen
forced many Japanese companies to outsource their manufacturing facilities of SE Asia.

The Germans and Japanese have allowed their respective industries to be exacerbated by
competition by moving low-cost and efficient operations offshore. This painful
transformation has taken place despite the labor law far less flexible and less performance
oriented corporate culture and slow economic growth compared with the U.S.
States. Today, German and Japanese companies are able to remain very competitive
without any significant loss of market share than their U.S.
counterparty.

Mr. Behravesh, Global Insight's chief economist Lawrence Klein Nobel Iaureate
conducted a study and found that contrary to conventional belief, 90,000 net jobs were
created rather than lost in the United States as a result of moving high-tech work offshore.

The report indicated that the lower costs resulting from the use of offshore resources keeps inflation in
control, increases productivity and keeps interest rates low. Furthermore, the advantages
Global sourcing in the United States has added $ 33.6 billion in 2003, the real gross domestic product in
United States. The report added that overall GDP should be U.S. $ 124,200,000,000
than without outsourcing.

Outsourcing is not the only way to create a "'organization virtually unbeatable. Of Fixing
some key functions in-house can sometimes still offer the organization more
flexibility. However, a company is caught when he has a strong orientation to do everything
in-house. Laura Ashley, for example, languished behind its competitors, insisting on
production of all products in Wales, long after others had moved their production
offshore.

Having recognized the benefits of outsourcing, they still got a little 'to do. Laura
Manager Ashley maintained manufacturing facilities in Wales for loyalty or expensive
social responsibility and protection of employment of staff. As a result, the loss of decisions
Laura Ashley group was purchased in 1998 by Malayan United Industries and
has closed five factories in Wales, pulling out of the production of clothing altogether.

The advantage when you do not have fixed costs is the flexibility and agility
make changes fast. This is particularly useful in areas afflicted with fickle demand.

Just go and find producers or new contract call center when the need
arises, without being tied to your internal resources. This allows a considerable saving
management time and energy that can be better deployed on tactical and strategic
planning. Management is not bogged down with non-core activities and low value. It
truly nirvana of accounting when the company, without the fixed costs can
generate profits....