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1、投影片1-californiastateuniversitylosangeles-OutsourcingStillwatersrundeep.流静水深流静水深,人静心深人静心深Wherethereislife,thereishope。有生命必有希望。有生命必有希望Presentation OutlineIntroduction to outsourcing in global economyType of outsourcing Outsourcing case analysisBenefits of outsourcing Criticisms of outsourcingAnalysis
2、and response to criticismsConclusionsIntroduction to Outsourcing in Global Economy Definition of outsourcing Integration of global economy and disintegration of production process Economic theory behind outsourcing Types of Outsourcing Production and manufacturing outsourcing Service outsourcingType
3、s of Outsourcing Production and manufacturing outsourcing Consumer discretionary products Consumer staples products Information technology products Telecom products Industrial products Healthcare productsTypes of Outsourcing Service outsourcing Technology services Business process outsourcingTypes o
4、f OutsourcingService outsourcingvTechnology serviceElectronic commerce (eCommerce)Infrastructure (Networks)Software (Applications)TelecommunicationsWebsite development & hosting Service outsourcingv Business process outsourcing Finance/Accounting Human Resources ManagementTypes of OutsourcingDell Co
5、mputer & Nike CompanyCommon Requirements Market access Labor costs and quality Transportation & telecommunications infrastructure Government incentives Industry clustersDell Computer & Nike CompanyDifferential StrategiesNike Companyl Contract manufacturersl Supplier investmentl Lower Educated Labors
6、Dell Computerl “Just-In-Time”l Contract manufacturersl “Build-To-Order”l Outside suppliersl Higher Educated LaborsDell Computer & Nike CompanyNike CompanyU.S. RegionFootwear, Apparel, EquipmentEMEA RegionFootwear, Apparel, EquipmentAsia Pacific RegionFootwear, Apparel, EquipmentAmericas RegionFootwe
7、ar, Apparel, EquipmentDell CompanyAsia Pacific RegionMonitors, PCBs, Drives, Box Builds, ChassisEurope RegionMonitors, PrintersScotland RegionPCBs,Eastern Europe RegionPCBs, Box Builds,Ireland RegionChassisDifferential Strategies (cont.)Dell Computer & Nike CompanyDells Service PartnerslSystem integ
8、ration - Electronic Data SystemlService and repair - IBM, Unisys, Wang & BancteclConsulting - Arthur Anderson and Gen 3Differential Strategies (cont.)Nikes Service PartnerslFinancing service - Sojitz Corporation of AmericalImport-export service - Nissho Iwai American Corp.Benefits of Outsourcing Red
9、uce cost - Outsourcing has provided many companies with opportunity to harvest the benefits of lower labor costs in developing countries with fewer worker rights and less environmental restrictions, and to take advantage of undervalued foreign currencies (e.g. Chinese Yuan). Benefits of Outsourcingl
10、Increase productivity - Outsourcing can substantially lower firm and consumer costs and increase productivity/quality to cost ratio. lFocus more on core competencies - Redirect capital investment and focus on product research and development, marketing and distribution, and customer relationship and
11、 customer service. Benefits of OutsourcinglPresent advantages to developing countries - These countries in general will benefit from outsourcing in terms of increased wages, job prestige, education, and quality of life. lEliminate the need to recruit, train and retain staff in non-core business and
12、to better anticipate future costs.Benefits of OutsourcinglGain on-going access to experts - The outsourced firms are usually very experienced and specialized in certain areas (e.g. shoe manufacturing in China) and outsourcers will benefit from their expertise. Criticisms of OutsourcinglFrom the stan
13、dpoint of labor - Outsourcing represents a threat to job security and decent wage. Outsourcing became a popular political issue in U.S., especially during the 2004 U.S. Presidential election. A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurt
14、s the economy and another 62% believe that the U.S. government should impose some legislative action against companies that transfer domestic jobs overseas Criticisms of OutsourcinglFrom the political standpoint - In his 2004 presidential campaign, Democratic U.S. presidential candidate John Kerry c
15、riticized US firms that outsource jobs abroad and that incorporate overseas in tax havens to avoid paying their US taxes. Criticisms of OutsourcinglQuality of service - Both consumers and management often focus on a central question: how does outsourcing production/service affect its quality as oppo
16、sed to “in-house” work. lSecurity issue there are some security issues concerning companies giving outside access to sensitive customer information. Analysis and Response to CriticismslFrom the standpoint of labor, work, and economyInternational outsourcing is a form of trade. As such, the basic pri
17、nciples of comparative advantage and the gains from the trade apply. The threats to overall employment or the economy is no more valid than threats from imports. Anything that increases economic efficiency whether by outsourcing or technological improvement is likely to cost somebodys job. Analysis
18、and Response to CriticismslFrom the standpoint of labor, work, and economyOutsourcing actually sustains American jobs. The flow of work to the lowest-cost supplier is a healthy market process that eventually benefits the countries by giving companies the financial power to develop new products and s
19、ervices, thus creates a fresh category of jobs that are a level higher. Outsourcing also helps the country stay competitive by constantly innovating and moving to the next higher level. Analysis and Response to CriticismslInsourcingOutsourcing helps to bring higher employment in developing countries
20、 and put more money in the hands of their consumers. Increasing purchasing power of these consumers will spur demand for more U.S. products and services.While some lower-pay jobs have been outsourced to developing countries, more higher-pay jobs have also been created. Analysis and Response to Criti
21、cismsQuality of products and servicesThe firm has the freedom to resume management control and/or decision making for that business process if quality is adversely affected. The decision to outsource is like the decision to expand a business overseas. If outsourcing leads to lower product quality or
22、 service quality, consumer demand will force firms to shift back to producing the good or service in-firm rather than out-firm.Analysis and Response to CriticismsSecurityWhen a company outsourced service like US Payroll, the Social Security Number of an U.S. employee can be one of the vital factors
23、because it can be used for fraudulent activities. Hence its very essential for a company to keep all the data intact, and ensure that no leakage of data is done. This will ensure total security and can avoid such cases of fraudulent activities.ConclusionslThe world has become increasingly integrated
24、 through trade in the last several decades.lThe structure of trade has shifted towards more outsourcing or vertical specialization.lThe emerging tide of outsourcing has engulfed the whole world and one cannot argue to ban outsourcing. Outsourcing is beneficial to consumers, companies, and the econom
25、ic growth of the nation.ConclusionslTaking a broader view of the general scheme of things in nature we should realize that just as everything has its pros and cones, the outsourcing too has its own.lThe real challenge for outsourcing is to manage the transition by grasping the gains while devising policies and strategies to absorb much of the resultant pains.lThe governments shall be mainly responsible for taking this challenge and devising their policies and measures to maximize the benefits of outsourcing for economic growth. Questions and AnswersThank You ! From George Zhu & ChengWei Lu
