Cost-effective operations is important for several business to beat and survive the competitive market. Outsourcing domestic operations of a business can enable the business accrue major profits. However, outsourcing operations are risky and faces many challenges in managing of the business. As a consultant to the Balagny Clothing Company, I advise them that, it would be a better idea for them to keep their domestic operations.
Outsourcing domestic operations has proved to be useful to the Balagny Clothing Company in many ways. They accrued lower costs due to the low labor rates, saved money from infrastructural maintenance, access to diverse skills and also acquired major profits from the business. However, the company was hit with heavy losses from customer dissatisfaction to heavy savings and profit loss of the business. One reason why the company should retain its domestic operations is because, it will be able to manage and take control of the business. Taking control of the business means that the company will ensure that the business is not disrupted in anyway. Issues like communication barriers can be managed (Feld, 2019).
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Communication is the key to any successful business. Consistency and effective communication between the company and the customer can break or make the business grow. The customer can try to ask about the company’s product or service, place an order for the product, or inquire to solve a problem pertaining the use of the product or service or bring to attention matters from a failed or incomplete transaction. The inability of the customer to communicate such information with the company’s representative will lead to the customer feeling irritated and unsatisfied by the company’s services. Also, when the company’s workers are fluent in the language of the geographical area of the business, customers will have an easier time of communicating their problems and having their concerns taken care of by talking with native speakers.
Additionally, the company will be able to manage cultural disparities where customers are given first priority in the manufacture of quality products. In the mini-case of Balagny Clothing Company outsourcing its domestic production, we can see how the company received complaints about the quality and the sizes of the garments. The Chinese company had altered the Balagny’s products to fit their production process and cultural disparities by using their own raw materials. When a company takes over its own domestic operations, it will be able to value the customer’s needs and desires. Therefore, the services and products made will be appropriate and relevant for the geographical market, customer cultural disparity segment or model of the business. Language barrier caused by cultural differences, can also be an obstacle between the customer and the company. Outsourcing domestic operations of the company will thus broaden this gap much wider.
Besides, according to Feld (2019), incomparable time zones around the world is also a barrier to outsourcing of domestic operations. The geographical distance between the two countries in which the business is being conducted is a barrier in the efficiency and flexibility of the company’s activities. Managing the company’s domestic operations will enables the company respond to customers faster, especially when issues are urgent. Outsourcing has sluggard response in times when a certain issue requires urgent attention. As seen in the case of Balagny Clothes Company, the company experienced time zone problems where, they had their goods delayed during transportation from China to its distribution center. This led to shorter selling periods at retail and the shipment dates for customers were pushed back. It would need strategizing strong support structures, based on time zones differences, in order to manage the business between the different countries and this would need proper attention and higher costs.
Balagny Company should keep their domestic operations because it will enable flexibility in the company. The operations in the business will be improved due to the free airing and flow of ideas in the company. The company will be able to create more job opportunities for the people in the community. Employing skilled and culturally diversified workers will enable the company solve many problems. Additionally, the company will be able to flexibly incorporate innovative and effective products in the market and in its production. Besides, the company will have an easy time in training and consulting with contractors through one-on-one personal meetings and assimilating of services and how the products work. This enables keep the company’s business flowing smoothly because of the proper understanding of the business operations. Also, giving skilled workers a chance to showcase their abilities enables innovations in the company. They will come up with different ideas that could help the company grow in various aspects. Innovative ideas on the products and services in the company can attract more customers and improve the company’s reputation and competitiveness in the market place.
Despite outsourcing being cost effective, some big outsourcing companies from other countries might drain huge costs from your company. Maintaining control of domestic operations will also enable the company secure its private data from other outsourcing companies (Gaille, 2020). This will help protect the company’s business. Therefore, Balagny Clothes Company should maintain its domestic operations if they want to take control of their business and avoid barriers like communication, cultural and time zone barriers. Besides, the company should employ more workers in the company with basis on the cultural diversifications. By keeping domestic operations, the company will accrue profits because it will not be sharing risks. The company will also focus on what is best for it and the customers, by providing quality products, relevant for the customers (Gaille, 2020). Additionally, innovations from diverse labor will attract more customers and innovators to the company, and the company will be able to survive the competition in the market place.
In summary, despite outsourcing of domestic operations being cost-effective, it is, in my opinion, a bad idea for any company. Outsourcing of domestic operations leads to a company losing its control over the business, sharing business risks, accruing poor services like low quality products and communication barriers and loss of focus of the business. All these cons sum up to losing customers, profits and reputation in the market. Therefore, it is a better idea for Balagny Clothing Company to keep their domestic operations.
References
Gaille, L. (2020, January 10). 21 Big Advantages and Disadvantages of Outsourcing. https://vittana.org/21-big-advantages-and-disadvantages-of-outsourcing.
Feld, S. (2019, April 15). Pros and Cons of Outsourcing: What You Need to Know. https://greaterphoenix.score.org/blog/pros-and-cons-outsourcing-what-you-need-know.
