Outsourcing
Outsourcing is when a company uses a third party to make a product or perform a service. On the other hand, a company is said to offshore when it moves some of its operations to another country (Josephson, 2018). Outsourcing or offshoring have several advantages and disadvantages to the company outsourcing or offshoring, the destination country and the citizens of both the source country and the destined country. Outsourcing could be of great value to a company as it may lead to an increase in the company’s profits. Increase in profits may occur when the company outsources or offshores to a country with lower labor costs.
Another benefit of outsourcing is that it may lead to an increase in economic efficiency. Outsourcing transfers responsibility to a more specialized company with the appropriate skills to handle such tasks. Specialized companies have highly skilled workers in a particular field reducing losses due to poor work is done or negligence. Off-shoring also provides benefits to foreign as it gives the job opportunities to those countries. Additionally, offshoring improves international ties between trading countries. When the amount of off-shoring activities between two countries become significant enough the two countries will have no choice but to strengthen their relationships (Josephson, 2018). On the other hand, outsourcing could have drawbacks as it could lead to job loss, lack of transparency, slippage in the labor and environmental standards and it can backfire on the outsourcing company.
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Supply Chain Globalization
The Coca-Cola Company is bottling multinational beverage company that operates in almost every country in the world (Slack, 2016). The company has embraced supply chain excellence as its major priority. To achieve this, the organization has embraced diversity to meet customers’ expectations. Its commitment to continuous adjustments ensures a continuously evolving portfolio. Also, diversity in the company’s leadership through effective succession planning and a mix of seasoned internal and external employees to ensure the company integrates industry best practices (Slack, 2016).
The greatest challenge for all supply chains is keeping up with trends and adjusting technologies and processes. Coca-Cola has managed this by using a variety of techniques like validated modeling techniques that optimize finished product sourcing and leveraging supplier spending. It also shares its best practices and commercializes new products and packaging rapidly. Also, the company reinvests in its supply chain with unanimity by using state-of-the-art (Slack, 2016). When the company excels in those mentioned above, it creates a significant impact on the company’s gross profits margins and shelf availability which ensures a positive impact on the company’s net revenue.
Another example of a company that has embraced supply chain globalization is Nike. Nike is an innovative sportswear company that ships more than one billion items of apparel and equipment annually (Crets, 2016). It must always adapt to the customer demand and tremendous growth. Therefore its main priority is to ensure a sustainable manufacturing and supply chain operations. It has always achieved this by incorporating sustainable solutions into its facilities such as renewable energy. Its primary sources of energy are wind, solar, biomass, geothermal, and hydroelectric (Crets, 2016). Additionally, its products are created from recycled footwear material, and more than 95 percent of waste generated on site is recycled. This ensures that the whole Nike ’s supply chain is 100% renewable.
Nike blends sport and culture into the design of their footwear (Crets, 2016). The purpose of these designs ranges from the basketball court to the running track and ultimately, the city streets. They include classic basketball and running shoes. Nike embraces the sports culture which means teamwork. Teamwork gives their employees the competitive nature just like the athletes they serve enabling them to reach the highest goals. The key goal is to delight their customers and exceed their expectations. Nike focuses on its customers, and the staffs do it in a collaborative, team effort. The company continuously innovates in the supply chain and works on a more sustainable better customer service environment. This gives Nike an upper hand in the global market.
Reference
Amelia Josephson. Smartassets. MAY 18, 2018. Retrieved From Https://Smartasset.Com/Career/The-Pros-And-Cons-Of-Outsourcing On July 27, 2018.
Stephanie Crets 24 August 2016. Nike. Supply Chain World. Retrieved From Www.Scw-Mag.Com/Sections/Retail/739-Nike On July 27 , 2018.
Eric Slack 06 December 2016. Manufacturing & Distribution Coca-Cola. Supply chain world. Retrieved From http://www.scw-mag.com/sections/manufacturing-distribution/800-coca-cola on July 27, 2018.
