Outsourcing in Manufacturing Sector by Indian Companies

TEAM MEMBERSPrachi Pote[13]Arpita Sinha[19]Pruthvi Rathod[28]Yatish Shetty[36]Neha Varghese[41]Ayush Singhal[48]

Agenda of the presentation• What is outsourcing?• Reasons for outsourcing in manufacturing industries• Challenges , risks in manufacturing outsourcing• Advantages & Disadvantages in the manufacturing outsourcing• Outsourcing by Indian companies• Trends in manufacturing outsourcing • Conclusion

What is outsourcing?

• Outsourcing is a strategic decision to give a task or activity to an independent contractor who determines how best to do the task or activity.

• Many organizations are skeptical about value of outsourcing for fear of loss of control and transparency.

• They assume their internal operations are “good enough” and improving them is not worth the perceived risk.

• Overlooking potential problems and areas for improvement, however, can result in a timid and complacent workplace culture.

Reasons for outsourcing in manufacturing sector• Manufacturing companies have a myriad of reasons for outsourcing

production, but the main impetus for deciding in favor of outsourcing usually boils down to one thing: COST REDUCTION

Challenges in manufacturing outsourcing• Low productivity• Talent & skill shortage• Inefficient supply chains• Lower level of supplier competence• Labour intensive• Suppliers failure to provide high quality products

Advantages in the manufacturing outsourcing• Using third party, companies can provide access to labour that is cheaper and

more efficient. • The quality of the labour is often still great, despite the reduced costs. • Moving manufacturing overseas can mean that companies can close plants in

their own countries.

Disadvantages in the manufacturing outsourcing• Despite the fact that third party companies can often provide quality labour at

a drastically reduced cost, there are sometimes moral issues that can accompany this type of labour.

• Outsourcing the manufacturing or other aspects of a domestic business means transporting large amounts of jobs elsewhere.

Outsourcing by Indian companies• KOMPEL PHARMA• AGEIS AUTO AND MANUFACTURING• MODTECH• OUTSOURCE2INDIA• INDIAN ELECTRONICS MANUFACTURING SERVICE

Conclusion