...Supply Management Outsourcing Purchasing is common to all organizations with any kind of supply function. It is one of the basic processes of supply management. As time has gone by, the term ‘purchasing’ has taken on a broader definition. As companies become more independent, more competitive, and start growing towards the future in technology, specifically e-commerce, purchasing becomes a strategy. Purchasing became “strategic sourcing.” Strategic sourcing has become a huge responsibility for the supply manager. There are a few activities that strategic sourcing accomplishes for the manager. It allows the manager to strategize the spending habits of the company, it forces the manager to strategically look in to the supply market for any changes, trends, and what other firms are offering, and it provides a method to develop a sourcing strategy that fits the company’s strategy to lower costs and risk, while bringing in a profit. Profit is produced through mastering or at least competently managing the five M’s; machines, manpower, materials, money, and management. Part of that strategy is where and how to source these 5 M’s that will meet the cost strategy of the company. This brings up the most strategic question a firm can ask of a supply manager; to make or buy? To meet the company’s needs that will consequently meet the current demand, should the company in-source or outsource? What should the company outsource? What are the functional areas of supply management...
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...Outsourcing Outsourcing is a strategy that concentrates an organization’s resources on its core competencies allowing the organization to achieve a definable preeminence and provide a unique value for customers (Behara, Gundersen, & Capozzoli, 1995, p. 45). The goals of outsourcing are strategic: improved efficiencies, lower costs, improved flexibility, higher quality, and a greater ability to achieve a competitive advantage. The ultimate strategic goal is to develop core competencies that develop into barriers of entry that make it difficult for competition to copy. By focusing on core competencies, and utilizing qualified vendors to provide process that are not one of the organization’s core competencies, the organization’s risk can be shared with its suppliers, and minimized. Core competencies are the collective institutional learning and capabilities of the company that allow it to supply products and services that uniquely add absolute preeminence in those competencies (Hilmer & Quinn, 1994, p. 47). “Core competencies are the innovative combinations of knowledge, special skills, proprietary technologies, information, and unique operating methods that provide the product or the service that the customer value and want to buy” (Greaver, 1999, p. 87). Activities that the organization must be proficient in are called its core activities. Core activities are those activities that are: 1. Traditionally performed internally with long standing precedence. 2. Critical...
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...Outsourcing Human Resources Management Functions: Recruitment and Selection Uni*********** Research Paper for HRM**** Section 1202 ********** March 16, 2012 Outsourcing Human Resources Management Functions: Recruitment and Selection Introduction In the recent past, the competitive environment for many organizations has changed, with the organizations having to operate in globally capitalized environments, rapid industrialization, and changing technology (Abraham, 1988); and just recently a global economic downturn which has had organizations to downsize their operations. As a result, these organizations are constantly seeking new managerial methods, as both a way for the organization to be competitive and to cut operating cost; the most successful method is the outsourcing of business processes. Normally the Human Resources Management (HRM) function of recruitment has traditionally been performed in-house; advocates for outsourcing this function have increased and argue that outsourcing can reduce costs associated with recruitment and selection (Klass, 2001). Some organizations delegate crucial human resource functions to outside firms as a means of utilizing available expertise, reducing expenses, and to be able to concentrate on important business activities (Abraham and Taylor, 1996). The influence of increasing levels of globalization, technological changes, the complexity of business...
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...REPORT ON OUTSOURCING Executive Summary Out sourcing can be defined as taking services of third party in order to get the solution or task done on time without hiring employees permanently in an organization. This paper is based on a case named “report on outsourcing”. In this case a manger wants to get an advice regarding the future of outsourcing in an organization. As per the current trend in the industry, outsourcing is the best way to get work professionally from experts all over the world. E-HRM is the term that defines “outsourcing HR” more technically. This paper includes academic journal articles and other literary sources; in addition company analysis examples are also included in this task. The issues discussed in particular are the evaluation of HRM factions in terms of outsourcing. Table of Contents Executive Summary 1 Introduction 3 Discussion 4 Concept of Our Sourcing 4 HR Fuctions Generally Outsourced 5 Recruitment 5 Training 5 Learning 6 Advantages and Disadvantages of HR Outsourcing 7 Advantages of Outsourcing HR 7 Disadvantages of Outsourcing HR 9 E-HRM 10 Role of E-HRM in Outsourcing HRM Function 11 Advice to the Client 13 Case Scenario Summary 13 Advice 13 Conclusion 16 References 18 Report on Outsourcing Introduction The Intelligent outsourcing is the use of contracted resources, assets and capabilities of a third party, guaranteed quality criteria, performance and value levels against the cost, as well...
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...Personnel Review HR outsourcing: threat or opportunity? Jeroen Delmotte Luc Sels Article information: To cite this document: Jeroen Delmotte Luc Sels, (2008),"HR outsourcing: threat or opportunity?", Personnel Review, Vol. 37 Iss 5 pp. 543 - 563 Permanent link to this document: http://dx.doi.org/10.1108/00483480810891673 Downloaded on: 27 September 2014, At: 02:58 (PT) References: this document contains references to 65 other documents. To copy this document: permissions@emeraldinsight.com The fulltext of this document has been downloaded 10667 times since 2008* Users who downloaded this article also downloaded: Jean Woodall, William Scott#Jackson, Timothy Newham, Melanie Gurney, (2009),"Making the decision to outsource human resources", Personnel Review, Vol. 38 Iss 3 pp. 236-252 John Hindle, (2005),"HR outsourcing in operation: critical success factors", Human Resource Management International Digest, Vol. 13 Iss 3 pp. 39-42 Peter Brown, (2010),"The power of HR outsourcing", Strategic HR Review, Vol. 9 Iss 6 pp. 27-32 Access to this document was granted through an Emerald subscription provided by 131740 [] For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com Emerald...
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...Running Head: HR OUTSOURCING AT PEPSICO HR Outsourcing at PepsiCo HR Outsourcing We all are aware with the truth that Human resources are the most crucial assets of every organization as the success of organization depends upon the management of its human resources. Ensuring the satisfaction of employees requires expert human resources department that is in reality a costly affaire for most of the organizations and due to this in present most companies are making decision regarding outsourcing their human resources management functions from offshore destinations (HR Outsourcing, 2008). Basically in this process of HR outsourcing an organization generally make use of the services of a third party for taking care of its HR functions. An organization may outsource a little or all of its HR related activities from a particular or grouping of service provides situated in offshore destinations. Role of HR Outsourcing at PepsiCo In this stream of HR outsourcing, PepsiCo is also not left behind from it as HR outsourcing plays a prominent role in its business operations. For getting various advantages of HR Outsourcing PepsiCo had selected Hewitt Associates for a 10-year deal that concentrates on HR business process outsourcing services like workforce and benefits administration, payroll and contact centre support (Bednarz, 2005). This HR outsourcing deal of PepsiCo with Hewitt Associates also concentrates on the...
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...Outsourcing Written by yaqoob Al-bulushi Thursday, 01 October 2009 08:06 - Last Updated Friday, 02 October 2009 19:31 The decision to proceed with outsourcing comes from strategic managements. Companies use strategic management to define set of decisions and action that result in the formulation and implementation of plans designed to achieve company’s objectives. One of the decisions can be outsourcing. The company has to go through different tasks to determine factors that will lead to a decision to proceed with outsourcing. It starts by formulating company’s vision, mission and value statement. Conduct environmental analysis that reflects the company’s internal and external conditions and capabilities. Analyze the Company’s options by matching resources with the external environment. Identify the most desirable options by evaluating each option in light of the company’s mission. Select a set of long-term objectives and grand strategies that will achieve the most desirable options. Develop annual objectives and short-term strategies that are compatible with the selected set of long-term objectives and grand strategies. Implement the strategic choices by means of budgeted resource allocations in which the matching of tasks, people, structures and technologies. If company finds out after analyzing its environment, it is looking at cutting operating costs of support functions, it needs to focus on its core business, its needs to reduce capital expenditure ...
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...report will start with definition of operations management concept. This will be followed by identifying some of the global factors affecting operations management in organisations and the impact such factors have on operations management in organisations and to assess how operations management can contribute to sustainable business activities . The second part of the report will describe how project management techniques contribute to the development of operations management and how project management techniques can be used to improvements the management of business operation in a multinational organisation. The effectiveness of business operations to organisational goal of Shell Petroleum will be discussed As operation management entails risk, the risk management techniques that can be applied to the management of a business operations (Shell Petroleum) and how to evaluate the risk to business operations in global markets will be discussed. How risk to Shell Petroleum operations be minimised for a business functioning in a global market will be discussed The technological infrastructure that supports operations management of Shell Petroleum will be identified and the contribution of information technology to it operations management will be analysed. The benefits to operational management of implementing technical solutions will also be analysed . The contribution of information technology to operations management of a multinational organisation (Shell Petroleum...
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...Pergamon PII: European Management Journal Vol. 16, No. 6, pp. 635–643, 1998 © 1998 Published by Elsevier Science Ltd. All rights reserved Printed in Great Britain S0263-2373(98)00040-1 0263-2373/98 $19.00 0.00 The Impact of Corporate Outsourcing on Company Value DAVID J. BRYCE, Wharton School, University of Pennsylvania MICHAEL USEEM, Wharton School, University of Pennsylvania Companies worldwide are expanding their use of outsourcing for services and products. This article appraises what is known about the impact of outsourcing on company value, and the emergent picture is not an unblemished one. Company managers frequently complain about the downsides, some companies have retrieved what they had sourced out, failures can be seen here and there, and the long-term potential consequences of outsourcing too much are yet to be seen. Still, the weight of the research evidence indicates that, when well designed and well managed, outsourcing reduces operating cost, enhances competitive strategy, and enlarges shareholder value. © 1998 Published by Elsevier Science Ltd. All rights reserved Many observers mark the beginning of the contemporary surge of company outsourcing with Eastman Kodak’s decision in 1989 to source out its entire information management to IBM, Businessland, and Digital Equipment Corp. Since this deal’s execution, now almost a decade ago, outsourcing has become a standard management device at many US firms, and corporate expenditures on it have rapidly accelerated...
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...retailer. Since, it had the volumes it was able to offer products cheaper to the customer. It always met the shipping schedule and therefore had a lot of satisfied customers. However, as Amazon expanded it kept on changing its strategy and adapted itself. This ensured that though the four value propositions were still maintained the supporting business model kept on evolving. Amazon's decisions in maintaining its inventory have been fruitful over time. Amazon took deliberate and conscious decisions in managing its Inventory. 1.0 Amazon’s Initial Strategy for Inventory Management After the initial success of its lean e-tailing model, Amazon realized that in order to grow and maintain customers it would need to create its own warehouses and stack inventory as per customer requirements. Though this made sure that the goods were delivered in time the company faced huge losses and suffered inventory management crisis. 2.0 The Drop Shipment Approach In order to tide over the problem created by over stocking, Amazon adopted the Drop Shipment Approach. Drop Shipment is an arrangement wherein the retailers usually forward the orders received from the customers to the manufacturers or distributors. Manufacturers then directly...
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...Perceived Impact of Outsourcing on Organizational Performance Dean Elmuti, Eastern Illinois University Introduction In todays world of ever increasing competition, organizations are forced to look for new ways to generate value. The world has embraced the phenomenon of outsourcing and companies have adopted its principles to help them expand into other markets (Bender 1999). Strategic management of outsourcing is perhaps the most powerful tool in management, and outsourcing of innovation is its frontier (Quinn 2000). Outsourcing is a management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers, or as Corbett (1999). President of Michael F. Corbett and Associates asserts, Outsourcing is nothing less than the wholesale restructuring the corporation around our core competencies and outside relationships. The traditional outsourcing emphasis on tactical benefits like cost reduction (for example, cheaper labor cost in low-cost countries), have more recently been replaced by productivity, flexibility, speed and innovation in developing business applications, and access to new technologies and skills (Greer, Youngblood, and Gary 1999; Bacon 1999). The market for providers of outsourced services of all types is growing rapidly. In 1996, American firms spent over $100 billion in outsourced business activities (Casale and Overton 1997). Other estimates place the total U.S. market for outsourcing at more than $300...
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...of one or more types of outsourcing (IT, HR, etc) review the pros and cons of outsourcing and examine its implications for future firm strategic direction. Introduction Outsourcing has become an increasingly popular strategic tool for worldwide organizations. Due to two key phenomena such as technological advances and globalisation, most organizations have be forced to continuously produce goods and services in higher qualities and lower prices. Since the benefits of outsourcing were revealed, it has become an increasingly widespread strategic tool among organizations. A survey reports that up to 90 percent of Australian employers had out sourcing at least one activity and at least half of them had outsourced cleaning, catering, maintenance and transport (Stone, 2005:61). On the other hand, only 5 percent of outsourced organizations had reported highly satisfied with the outsourcing services ( McIvor, 2000). To gain a better understanding of whether outsourcing should be continuously pursued as a strategic tool, the following essay will be divided into four main parts. The first section will contain an outline of the motives of outsourcing. The second will be an exploration of possible advantages and disadvantages associated with the process. The last part will include implications for the strategic direction of the firm. First and foremost, it is essential to define the key terms relevant to the essay. According to Stone (2005,60), outsourcing is an organization contracting...
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...document.] | Contents 1. Definition of outsourcing 3 2. Functions outsourced by HR 3 3. Advantages of outsourcing HR Functions 4 3.1 Managing and minimising risk 5 3.2 Cost Savings 5 3.3 Efficiency and economies of scale 5 3.4 Professional Expertise 5 3.5 Improved Employee Morale 6 4. Disadvantage 6 4.1 Poor Performance and decline in quality 6 4.2 Distance and lowering moral 6 4.3 Recruitment Problems 6 4.4 Leak of important internal information 6 4.5 Perceived loss of power and control 7 4.6 Increased Direct Costs 7 5. e-HRM 7 5.1 Objective of e-HRM 7 5.2 Advantages of e-HRM 8 5.3 Disadvantages of e-HRM 8 6. Conclusion and Advice to the Client 8 1. Definition of outsourcing The Human Resource department is considered to be one of the highly accredited departments of the organization; these are the people who provide the working resource to the company and keeping the company afloat even in the worst economic downtime. The best way in which the HR can be managed is decided by the HRD. The ways in which the human resource management is done has changed considerably in the recent years. The HR activities and functions can now be delivered, not only by the specialised Human Resource professionals, but also through outsourcing (Ulrich 1996; Tremblay, Party and Lanoi 2008). The HR outsourcing can be defined as the purchasing of the HR functions and services from a third party supplier. HR outsourcing can also be defined as the process of...
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...What are the pros and cons of outsourcing to China? By: Introduction The Objective is to explore key factors and pros and cons in outsourcing to China. Research findings identify obstacles faced by both parties in outsourcing. Economic factors are motivational factors in outsourcing to China. Cost reduction, savings, and investment reductions are the main concerns. Benefits focus on core competence, flexibility, and market penetration. Companies in China have ran across several obstacles such as poor communication and lack of preparation. Common Approaches There appears to be three commonly used approaches to outsourcing decisions (as also noted by Bolumole et al. 2007): transaction cost economics, resource based theory, and network theory. Other researchers have explained differences between these approaches(e.g. Mayer and Salomon 2006) Service Provider The vast majority of Chinese enterprises dealing with outsourcing have a single service provider. The Chinese enterprise must establish the right business requirements in order to be successful. Some of the first generations of outsourcing the senior management teams were not very happy with the results of the first few years. The management did not understand how to construct a sourcing strategy to meet the business needs. Management was unclear about the outcomes expected from outsourcing with the provider. In order to prevent unrealistic expectations they found planning to be extremely important to develop the proper...
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...DSC 2006 Operations Management Outsourcing [pic] I. Introduction Outsourcing is used extensively by both the manufacturing and service industries, and there are plenty of reasons to utilize outsourcing. Organizations make use of outsourcing usually in the interest of lowering cost and to make better use of time and energy costs, hence redirecting their energy to something more important or just to conserve energy. Outsourcing is essentially a division of labour. One simple example involves companies outsourcing their financial statements to accountancy firms to consolidate their expenditures, hence eliminating the need to hire an accountant. Another relevant example would be to hire the services of another company to manage all or parts of the services that otherwise would be otherwise rendered by an IT unit of the organization. Some reasons for outsourcing include organizations being able to focus purely on their core business, for example an automobile factory. The raw materials required to manufacture an automobile are outsourced to other companies and hence the company itself can focus on just creating quality automobiles. By outsourcing the raw materials to companies who specialize in providing them, they can also ensure that the raw materials are of reasonably better quality and this can be done by contracting with a new service level agreement. Another reason being companies are able to access the wide pool of talent available through hiring agencies. In layman terms...
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