| Outsourcing is not a temporary solution but a strategic | | | | established, enterprise can support human |
| orientation of many enterprises at present and in the | | | | management and training approaches, etc. as well as |
| future. It helps reduce expense, improve core | | | | share difficulties and advantages. |
| capabilities and product quality, reduce risk etc. | | | | Enterprises in developed countries only focus on |
| Business Process | | | | market accessing and customer to learn more about |
| Based on values created by the enterprise, we can | | | | required values, investigate, research the solutions, |
| see 2 parallel processes: Business Process and | | | | distribution and logistics; in terms of production, they use |
| Support Process. | | | | outsourcing service to take the advantages of low |
| Business process starts from accessing market and | | | | labour cost. |
| customer to required values, investigating, researching | | | | The real benefits from outsourcing. |
| approaches and organizing production, distribution, | | | | According to survey results conducted by some |
| logistics and serving. This process directly creates | | | | international market research organizations, 85% of |
| added values o customers and market. Support | | | | leaders of largest companies in the world, which are |
| process is responsible for active support in the areas | | | | specialized in information and electronics, plan to move |
| of human resources, finance, information, relationship | | | | production based to outsourced destination. IT sector is |
| and institution. | | | | always in the lead of providing outsourcing services |
| In business process, enterprise can have some options: | | | | and currently more than 2/3 enterprises in the world |
| - Cover all steps (from marketing to serving) without | | | | use IT outsourcing services. In fashion sector, the |
| outsourcing | | | | percentage of enterprises using outsourcing services is |
| - Initially, cover some steps (and outsourcing some | | | | very high. However, in other sectors, the trend of |
| other steps), gradually cover all steps. Outsourcing is | | | | outsourcing entire project is not attracted by |
| just temporary. | | | | enterprises. The reasons to adopt partial outsourcing |
| - From the beginning, implement some steps and the | | | | (usually production) are as follow: |
| rest are outsourced to other companies. Outsourcing is | | | | Firstly, transferring production base management |
| long-term development strategy. | | | | (including facilities and manpower) to another enterprise |
| - Initially implement all steps. After a while, move from | | | | would turn fixed cost into variable cost. If the |
| facilities management to outsourcing. Outsourcing is | | | | enterprise outsources production base management |
| long-term development strategy. The enterprise goes | | | | from the beginning, it can minimize fixed cost, creating |
| towards partnership to bring about the highest added | | | | its real motivation and flexibility. When sales situation is |
| value to customers and marketplace. | | | | not so good in the marketplace, outsourcing is the |
| Common trend of the world | | | | policy for enterprise to share risks. |
| In the beginning of 1990s, management model of | | | | Secondly, the partner who adopts "co-contracting" for |
| enterprises was built towards "swiftness and flexibility" | | | | the enterprise might also provide this service to other |
| which originated in the US, expanded to Europe and | | | | enterprises. Therefore, cost and price will be lower |
| Japan at late 1995 and early 1998 respectively. To do | | | | because of economy of scale development. |
| this, outsourcing process was implemented by | | | | Thirdly, the partner who provides outsourcing service |
| outsourcing entire production out of the enterprise and | | | | has to be specialised in that area, thus the quality is |
| keeping key steps including research & development, | | | | ensured as required, and the enterprise that uses |
| design and marketing. | | | | outsourcing service does not have to spend money on |
| With the constant change in models and features of | | | | training staff. |
| products in IT or fashion, enterprises cannot cover all | | | | Fourthly, the enterprise that uses outsourcing service |
| steps from research to production and distribution. | | | | can save time and money to concentrate on |
| Therefore, production management is outsourced to | | | | improving and expanding core capabilities as well as its |
| other companies. Different from subcontracting in the | | | | specialized skills in research, design and brand |
| past, enterprise now takes charge of production in the | | | | promotion. |
| framework of "Co-subtracting". It means that | | | | In conclusion, outsourcing is a policy that enterprise |
| enterprise must possess high core capacity level and | | | | should prioritize. It makes enterprise more swiftly and |
| skills in production. | | | | flexible, helps turn fixed cost into variable cost to |
| On the other hand, expense for finishing a task is | | | | minimize cost and risk. In the trend of globalization, |
| various and there are large differences between | | | | enterprise development strategy must consider |
| developed and developing countries, especially in labour | | | | competition and partnership to know how to bring |
| costs. In such labour-consuming areas as garment, | | | | highest added value to customers (in that scenario, |
| software etc. outsourcing is cost-reducing strategy | | | | direct customers will be companies that replace |
| that many enterprises adopt. And in order to ensure | | | | production base management with using outsourcing |
| the quality, enterprise usually send its staff to | | | | services), facilitating sustainable development of the |
| outsourcing partner's office to monitor. More | | | | enterprise. |
| sustainably, when the long-term relationship is | | | | |