Corporate Business

Outsourcing is the latest trend in most areas of business. In a very simple sense, it’s ‘get it done from outside’. This tendency has been adopted by many industries because of some major advantages the system offers:

Cost effectiveness
Expertise
Effective time management
Increased productivity
Reduction of administrative work

I have a tale to tell to illustrate the above reasons. My story begins when outsourcing was not a popular recipe for effective business practices in in India, except for a very few who understood the arrangement earlyier than most.It was way back in 1989 and I had a small pest control business for the past five years. I was young and bubbling with energy to work round-the-clock and build an empire for myself. I was in constant touch with many of the companies in the corporate sector in Calcutta (now Kolkata) to market my company and I was looking for ways to branch out from pest control.

I was extremely lucky to get an offer from a well established British founded paint manufacturer to do repacking of synthetic enamel paints for them. The arrangement at that time was that all the packing material and the paint in bulk would be supplied to me by the company and I was to provide only the equipment and the required manpower to do the job. This, of course, did not fit into thepreconceived role of outsourcing. The company offered me a conversion rate as remuneration and a 1% handling loss as per the packaging norms prevailing at that time.

With immense joy of diversifying into a new line of business, the thrill of working for a giant in the paint industry, I accepted the offer and set up the repacking unit within a month’s time. Little did I comprehend, that this was ‘outsourcing’, and this was the very first step the company’s management took to increase their productivity in synthetic enamel segment.

Most of the industries and the service sectors in India, especially in Calcutta are crippled by trade unions. This, as we all know now, will slow down growth of the company / industry. This company too was facing the same problem. They could not meet the market demand in full, during the peak festive season. The supply figures were monotonously steady throughout the year and kept at the minimum, as the production was decided by the laborers. If they had to produce more quantity, they demanded overtime – an increased cost for increased production. And in complete contrast, my unit was waiting for fresh supplies of paint in bulk to produce more and more, and send it to the market.

At this stage of operation, the expertise required was neither very technical nor complicated. The two major aspects which we had to be cautious about were the uniform consistency of the paints and the accuracy of the weights. These two aspects were taken care by machines.

Within a year, we improved the infrastructure of our unit by procuring more sophisticated automated filling, batching, and coding machines and the parent company was also happy to increase the products sent to us for repacking. We also set up a laboratory for various quality checks, as by now we were procuring all the packing material including branded containers, cartons, etc. on behalf of the company. Our factory became an ancillary unit of the parent company, which was operating almost round-the-clock and met all the deadlines set by the marketing department!

Soon the news of our services spread in the paint industry circuits and one more UK based paint manufacturer appointed us as their ‘processing and repacking unit’. With some training and a little support from the company’s technical members, our team developed metal primers and cement primers at a far less cost than the well known brands we were working for. On submitting the samples to the companies for quality tests, our products cleared the QA requirements were accepted. Thus we started to manufacture primers for these two companies. The major cost reduction was in the production area as our workers were relatively less experienced, therefore less costly and our machines were more modern and batch turnaround was faster because of smaller batch sizes as opposed to very large batches produced by the company.

These parent companies never had to worry about plant malfunctioning, power cuts, labor troubles, finance for raw material purchase, production, inventory, logistics and so on. The company therefore could deploy their skilled laborers and qualified technicians for more specialty products and thereby improve on quality and quantity. The company’s time management improved, and they could focus on core aspects of business.

So basically, this arrangement that was set up did benefit both the outsourcer and the vendor mutually in many areas. Over the years, a relationship was built between the two beneficiaries, sometimes, even beyond business arena. When two organizations work in this manner to increase each other’s value, the association will gain new meaning and outsourcing will create lot more opportunities for both the parties to increase their focus and productivity in their respective lines of business.

Today, not only are most large and medium sized organizations deciding to outsource almost any departmental functions to a vendor, but the concept of outsourcing is being adopted by the likes of a working mother, or a student, or almost anyone who needs support in getting their tasks done. Quite often organizations choose support functions such as Customer Care, HR, Finance, IT etc. to outsource. And this is because there is a large global marketplace of service providers wherein one can choose any level of expertise and/or talent in the desired areas to suit ones requirements. Sometimes these outsourced talents outperform or are more effective than in-house employees. And of these, Customer Care/Support is a very crucial area which needs to be carefully monitored. This services provided by a vendor could make serious, direct and immediate impact to the image of the organization in both positive and negative manner.

With the increase in demand for outsourcing tasks, and with so much of service providers available in the global market, the outsourcer finds it difficult to select the right service provider. To solve this problem, and some more allied problems, there are a number of organizations who provide the service of matchmaking for both parties. These service providers takes care of the worries and interests of both the ‘service giver’ and the ‘service taker’, and also ensure that best trade practices are followed by both parties in completing an assignment.

About the Author:

OutSorcerer is a leading provider of Virtual Assistance It has a band of writes to support the clients for various creative writing needs.They also support the OS blog to educate us about how to use virtual assistance to increase your work productivity.

Article Source: ArticlesBase.com - Outsourcing: Behind the Scenes