I need to respond to two of my peers

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Consider the organization requiring outsourcing that you selected for your final project. For your initial post, provide the following:

  • A brief description of the product or service that the organization will be outsourcing
  • A potential region for the outsourcing, given the location of the warehouse location you identified for the final project; this region can be broad (e.g., north, south, east, west)
  • An overview of the factors that would influence your decision to outsource, including potential risks and benefits
  • A recommendation and justification for single source or dual source

In your response posts, provide feedback on your peers’ responses. Provide suggestions for additional factors they may not have considered. Compare and contrast aspects of their findings with your own.

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Caterpillar Outsourcing Courtney Hilton posted Jul 4, 2018 1:08 PM I conducted my location justification report on an expansion of Caterpillar to South Korea. There is a lot of pressure in the construction industry to reduce costs and maximize resources while simultaneously providing high-quality products. This is easier said than done, however, as there is often a higher demand than supply in the industry. This is what makes offshoring an appealing option. Outsourcing certainly poses advantages, including cost efficiency, domain expertise and improved scalability (Construction, 2018). Having a manufacturing plant in country does indeed reduce import and transportation costs. This is especially amplified in an industry where the product is very large, and there is such an expansive geographical distance between the two countries. While Caterpillar already has an advanced supply chain system in place, including shipping equipment overseas, one are that I believe could make sense to outsource is in on-site delivery and warehousing of products. Nearly half of the South Korean population live in Seoul, which means that more than likely this is where a majority of construction products will take place. Thus, it is important to have a warehouse and port in a location that is central to where construction projects are happening. I believe that one of the best areas for warehousing would be in Incheon, which is just a short distance from Seoul, and home to the second largest sea port in the country. With all pros comes cons, however. One such con is the effect that outsourcing will have on company culture (Patel, 2017). This would be a key consideration for this move, as Caterpillar often finds itself under heavy scrutiny forits bloodbath layoffs. The great thing about Incheon and Seoul, aside from being geographically very close to each other, is that they are also two dominant expatriate communities. To preserve American jobs, the hope would be that there would be a delicate balance in finding U.S. citizens to relocate overseas, while also taking advantage of local expertise. Sources Patel, D. (2017). The pros and cons of outsourcing. Forbes. Retrieved from https://www.forbes.com/sites/deeppatel/2017/07/17/the-pros-and-cons-of-outsourcing-andthe-effect-on-company-culture/2/#33efec752608 Outsourcing construction services. (2018). Source Fit. Retrieved from https://www.sourcefit.com/outsourcing-solutions-industries/construction 10-1 Discussion: Outsourcing Pablo Kiger posted Jul 5, 2018 8:13 AM In the expansion of Walmart´s produce department to South Korea, outsourcing happens to be a key strategy by which an organization contracts out major functions to specialized and efficient service providers, who ultimately become valued business partners. Three are the main services I´d outsource • Application maintenance and development. • IT and networking. • Customer service. • Marketing. Walmart will benefit greatly from having most of these services sourced from China, South Korea, and India. Having a local customer service department or a department being led by South Koreans as well as marketing service will help greatly on understanding customers needs, trends, consumption patterns and local changing environments. Potential risks are: (Swink, et al 2016 p. 339). Supplier technical, operations, or quality problems. Supplier financial problems. Labor disputes. Inadequate physical, information, and intellectual property security. Disasters such as fires, earthquakes, hurricanes, and floods. Political instability. Changes in government regulations. The concentration of suppliers within the same geographical region. Benefits we are considering by outsourcing these key activities are: To reduce the total cost Enhanced quality of the products Access to innovation and technology Single source or dual source? I would recommend starting doing dual source and then reduce it single source. The idea behind it is to hire two preferred suppliers to provide the same product or service. After evaluation (based on the RFT – request for tender – requirements, contracts, disclosure agreements, intellectual property agreements) the company will move to a single-source of these services. Request for Tender manager requires a shipper to be very clear on the proposed scope of the partnership. From inbound to outbound, inventory management and value-added Services, providers should make sure that all activities in the scope of the arrangement are documented to a fine degree of detail. Reference • Swink, M., Melnyk, S. A., Harley, J. L., & Cooper, M. B. (2016). Managing Operations Across the Supply Chain (3rd ed.) New York, NY: McGraw Hill. • "Walmart: Operations Management 10 Decisions, Productivity." Panmore Institute. Nathaniel Smithson, 26 Aug. 2015. Retrieved from Web. 05/052018. http://panmore.com/walmart-operations-management-10-decisions-areas-productivitycase-study-analysis
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