The Advantages and Disadvantages of Offshoring

Development of the Business: When offshoring operations, you are able to free up the workload on your current employees. The company managers ... Solutions Integrations MostPopularIntegrations»  -KinaxisRapidResponse  -SAP  -MSDynamics365forOperations/AX  -ApteanRossERP OtherIntegrations»  -SAPBusinessByDesign  -SAPBusinessOne  -OracleE-BusinessSuite  -MicrosoftDynamicsNAV  -MicrosoftDynamicsGP  -QAD  -Infor  -Factivity  -Sage  -Syspro SmartFactory&Industry4.0 Superplant Buying Features»  -Compare  -Features  -WhychoosePlanetTogether?  -ProofofConceptProcess  -FlexibleOnboarding  -AdditionalServices Pricing ForStakeholders»  -OperationsManagers  -ITDirectors  -Planners&Schedulers  -FinancialOfficers Resources FreeAssessement Videos»  -APSFunctionalityDemos  -AdvancedAPSConceptsVideos  -PastWebinars ScorecardOffer WhitePapers&Downloads CaseStudies Infographics FAQ Trending(blog) Support»  -KnowledgeBase  -LearningCenter Company ContactUs»  -Sales  -Referrals/Partner  -EngineeringInquiries  -SupportInquiries  -Non-ProfitProgramInquiries CompanyOverview OurTeam Careers PartnerListing DEMO FREETRIAL TheAdvantagesandDisadvantagesofOffshoring 9/14/2010:30AM By PlanetTogether Productionoffshoringconsistsofphysicallyrelocatingsomeorallofyourmanufacturingprocessestoanothercountry.ThisbecamepopularinthelastfewdecadesaslaborcostsincountriessuchasChina,thePhilippines,andIndiawerecheaperthanthoseintheUnitedStates.  Therearealotoffactorsthathavechangedsinceoffshoringbecamepopular.Assuch,itisimportanttoconsidertheadvantagesanddisadvantagesofoffshoringbeforedecidingwhetheritisagoodbusinessdecisionforyourcompany.  AdvantagesofOffshoring: AccesstoSkilledLabor: Offshoringyourproductionmeansthatyouhaveaccesstoagreaterpoolofskilledlabor.Youhavetheopportunitytochoosetooffshoreinregionsthathaveparticularexpertiseforyourtypesofoperations.Youmayalsohavetheabilitytoaccessandimplementnewtechnologiestomakeyourproductionmoreefficient. DevelopmentoftheBusiness: Whenoffshoringoperations,youareabletofreeuptheworkloadonyourcurrentemployees.Thecompanymanagersareabletousemoreoftheiravailableresourcestofocusonotherareasofthebusiness.Thiscanthenallowcompaniestoexpandtherangeofservicesorproductstheyoffer. ReachNewMarkets: Whenyouareoffshoringyourprocessestoothercountries,youhavetheabilitytoworkcloselywithprofessionalswhocanhelpyoumarketyourproductstoanewaudience.    DisadvantagesofOffshoring: QualityControlProblems: CountriesoutsideoftheUnitedStatesmayhavedifferentrulesandregulationsforthequalityofproductsbeingproduced.Thiscancauseproblemsifthecountrieswhereproductionisbeingoffshoredtohavelessstringentrequirementsforproductquality.Thiscanleadtoproductsnotcomplyingwiththestandardsofqualitythataredesiredbytheparentcompany.  RisingLaborCosts: Althoughtheinitialappealofoffshoringwasduetothelowlaborcostsofothercountries,recentdatashowsthatthecostsoflaborinthosecountriesarerising.Inadditiontotherisingcostsoflabor,thecostsofshippingandotherdutyfeesarealsoontherise.   SecurityIssues: Sharinginformationbetweensystemsandlocationsincreasestheriskforasecuritybreach.Thiscouldleadtodataleaksorlossofdatawhichcanbecostlytothecompany. IncreaseinUnemployment: Whenthephysicalinfrastructuresaremovedoverseas,thereisariskforthelocalemployeestolosetheirjobsiftheyarenotabletoworkinotherareasofthecompany.Thiscannegativelyimpactthelocalperceptionofthecompanyifalotofpeoplelosetheirjobsasaresultofoffshoring.  Whenconsideringoffshoringsomeorallofyourproductionoperationsoverseas,itisimportanttoconsideralloftheadvantagesanddisadvantagesthatcomewithit.Then,youwillbeabletomakeaninformeddecisionthatisbeneficialforyourcompany.    AdvancedPlanningandScheduling(APS)Software AdvancedPlanningandSchedulingSoftwareshavebecomeamustformodern-daymanufacturingoperationsascustomerdemandforincreasedproductassortment,fastdelivery,anddownwardcostpressuresbecomeprevalent.Thesesystemshelpplannerssavetimewhileprovidinggreateragilityinupdatingever-changingpriorities,productionschedules,andinventoryplans.APSSystemscanbequicklyintegratedwithanERP/MRPsoftwaretofillthegapswherethesesystemslackplanningandschedulingflexibility,accuracy,andefficiency. 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