Outsourcing Flashcards
What does outsourcing allow businesses to do
Outsourcing: The use of an external organisation to complete part or all of an activity in a production process.
This allows businesses to match the supply to demand
It also reduces costs if you only produce products when they are ordered - Dropshipping, contractors, print on demand.
Used to deal with unexpected increase in demand.
Can allow a business to focus on a particular part of a production process
Allows the business to save money on in house manufacturers, and allows on investing on staff that deal with other operation in the business
What are some benefits of outsourcing
Allows a business to increase production levels to beyond their capacity - Non standard orders can be fulfilled
Allows a business to focus on core areas of competence - If your good at making computer chips, it allows you to master creating them, and allows the rest of the computer to be made by another party
Non standard orders can be catered for
