Outsourcing on Today’s Graduating Engineers
Engineers, no matter what discipline, are a high commodity these days. The industry is at a point where a lot of the older engineers are retiring, which leaves jobs and openings for engineers just graduating from college. The question is where will they be working. Will they be working for a Fortune500 company or and up-and-coming company? A lot of companies outsource work these days. One might ask, “What is outsourcing?” In this paper, I will explain to you outsourcing, and its effects on today’s graduating engineers.
What is Outsourcing?
Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering firm or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, (information) technology and resources.
Process of Outsourcing
1. Outsourcing Decision - The decision to outsource is taken at a strategic level and normally requires board approval. The process begins with the client identifying what is to be outsourced and building a business case to justify the decision. Only once a high level business case has been established for the scope of services will a search begin to choose an outsourcing partner. Due to the complexity of work definition, pricing, and legal terms and conditions, clients often utilize the advisory services of outsourcing consultants to assist in scoping, decision making, and vendor evaluation.
2. Suppliers Proposals – This is when a company contacts suppliers asking them for a proposal and a price.
3. Supplier Competition – This is when a company receives proposals and pricing from suppliers. The company evaluates the pros and cons of each supplier. The company conducts meetings with the suppliers to find out their plan for execution this project/proposal. From there, the company creates a Bid-Tab sheet comparing each supplier.
4. Negotiations - The negotiations take the suppliers’ proposal, the Bid-Tab sheet and convert these into contract agreements with the suppliers for the best contract.
5. Contract Finalization - a contractual agreement that defines how the client and the supplier will work together. This is a legally binding document and is core to the governance of the relationship. There are three significant dates that each party signs up to the contract signature date, the effective date when the contract terms become active and a service commencement date when the supplier will take over the services.
b. Assuming Ruhling is now interested in a requirements contract, how should Ruhling proceed with the bidding/award process?
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Selecting the right procurement route can have a direct impact on the level of success to a project. There are various items that must be factored before making a decision including: size of the project,
Outsourcing is a strategic activity in which some of the internal activities of the organisation are delegated to external firms because of various reasons such as:
The significant level of outsourcing programs used across all business sectors is well documented in the literature (Bender 1999; Quinn 2000; Dun and Bradstreet 2000; Klaas, McClendon and Gainey 2001). Past research has progressed along several paths. First, some researchers have focused on motivations and reasons for outsourcing activities (Conner and Prahalad 1996; Greer et al. 1999; Sinderman 1995; Mullin 1996; Grant 1996; Frayer Scannell and Thomas 2000). According to this perspective, the global imperative for outsourcing accelerates as firms evolve from sellers of products and services abroad to setting up operations in foreign countries and staffing those operations with host countries or third party nationals (Greer et al. 1999). Most corporations believe that in order to compete globally, they have to look at efficiency and cost containment rather than relying strictly on revenue increases (Conner and Prahalad 1996). As companies seek to enhance their competitive positions in an increasingly global marketplace, they are discovering that they can cut costs and maintain quality by relying more on outside service providers for activities viewed as supplementary to their core businesses (Mullin 1996; Grant 1996).
Outsourcing has only very recently become an issue in the United States, and as a result it has become a very popular political issue during campaigns for presidency. Outsourcing is the idea that a company will subcontract to a third party, usually outside of the US, for various parts of its business structure. An example of this and perhaps the largest source of outsourcing is call centers for tech support, where a company will subcontract to a third party and that party will build up the call center and hire the workers for it. Many people have been affected by outsourcing since it started being used widely in the 1980s, and most would argue that outsourcing is not a good business model, that while it not only negatively affects them, it affects the whole economy. While there are some unmistakable positives to outsourcing, I would argue that as a whole, the negatives far outweigh the positives and outsourcing is bad for the United States.
As a project manager, one must understand the procurement concepts, regardless of whether you are a buyer or a seller. Needless to say, procurement management helps identify a suitable supplier or contractor to procure goods or services. In most cases, a procurement contract is created. A procurement contract is an agreement in which the buyer agrees to acquire goods or services from a seller in exchange for consideration. A contract is a legally binding agreement between two or more parties. Usually, one party is known as a buyer and the other as the seller. This binding agreement is the key to the buyer and seller relationship and this provides the framework for how they will transact with each other. These contracts are mostly
We can define that outsourcing is a practice that having a done certain job functions outside a company instead of having an in-house department or employee handle it. We can outsource it either to expert company or an individual. We must use a strategic solution to less the impact on stability of finance and company growth.
Outsourcing is a term defined as the movement of jobs elsewhere to another company that can perform the same tasks, even though there is the potential of doing the jobs inside the company itself. An example of outsourcing is currently being done at your company, where contractors, usually part of their own contracting company, are performing the duties the old employees used to do. Another example of outsourcing can be moving jobs overseas, such as to developing nations, where cheap labour is readily available and the laws are much less restrictive. In both of these circumstances, the aim of outsourcing is to provide a cheaper alternative for the company, while improving its efficiency. Though there is usually deep public backlash from workers right over Australia, when jobs are being sent overseas.
For firms who are purchasing semi finished goods from outside supplier will make a contract for a long period and due to repeated relationship the fir...
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
A starting point of consideration is the level of responsiveness of the applicant (Solish 2012). This refers to both the completeness of the application where all requested questions have been answered in keeping with the initial request. Consideration should also be given to a supplier that is able to demonstrate deeper understanding of the task and or request being made as this will show they are in a position to not only understand the requirements, also highlight there suitability to the task being requested. In addition to this it is prudent to track how quickly follow up questions are actioned as the responsiveness of the supplier can be used as a reliable indicator to their interest ...
In order to thoroughly grasp the significance of outsourcing to India, it is important to review the basics of outsourcing. Outsourcing is formally defined as the procuring of services or products, such as parts or labor, from an outside supplier/manufacturer in order to cut costs. In more simple terms, using services (usually labor) that cost less. There are five important questions when dealing with outsourcing: who, what, when, where and why[1]. Why you should outsource will be addressed later on, so this section will focus on answering the other questions.
... material specifications, and the purchasing process itself. In the event that the process changes, purchasers should hold bidders' meetings to convey these changes. An alternate instrument procurement specialist in the public sector should consider in bid evaluation is the "should cost" strategy. "Should cost" pricing is obtained by calculating an estimate of the supplier's real cost to create and deliver the materials or services requested. This examination can then be utilized to discover inefficiencies or options to decrease expenses. Should-cost pricing is produced by building expense models dependent upon both standard information and data that has been asked for as a component of the RFQ process. The expense models can additionally be utilized within negotiating the last contract and in negotiations that may happen if the supplier asks for a price increase.
This system connects, accumulates, processesas well as provides imperative information to all parties thus enhancing continuity in the procurement process. However, if valid output is to be expected, features as well as requirements of the procurement process must be compatible to current system technologies (Giner, et al, 2011). The harmonization of suppliers as enhanced through the adoption of electronic sourcing enables firms to readily identify new potential suppliers for specific needs when old suppliers` capabilities are in question. The adoption of E-tendering that supports sending requests of pricesand information to suppliers as well as receiving suppliers responses improves on procurement efficiencies as it leads to significant cost reductions thus leading to better procurement performance through cost savings.For this system to achieve desired results however,all users must beready and willing to adopt the new systemsso enable seamless adoption and consequently ensure optimal