Abstract
Abstract
This paper is aimed at assessing the effects of outsourcing for organisations especially those in the defence industry. The author analysed the strategic reasoning behind the outsourcing approach and other motivating factors that include financial, strategic and political. To a higher degree, the paper identified that most authors attribute outsourcing as a strategy that helps an organisation retain and sustain its competitive advantage over its rivals through focus on its core activities. The study revealed that the biggest driver for an organisation to get to a competitive advantage is through flexibility. Flexibility is interweaved with other outsourcing motives such as improved time to market, access to new technology, transforming fixed costs into variables and focus on core activity.
Further the author identified that flexibility is also key for an organisation to suit the lean approach and concept that is demanded by modern supply chain strategy. The lean concept was also an area of worth mention as its synchronisation with Just-in-time approach emphasise the elimination of waste and production of item only when they are needed in contrast with over production and pushing them to end user. Flexibility was also analysed to be another key factor as the concept of continuance improvement through which avoidance of wastes or Muda is founded.
The paper further analysed outsourcing risks. This was another area worth exploring as risk in business would mean break down in supply chain that can be attributed as putting a spanner in the works thereby all the mechanism fail.
This is in recognition to the fact that supply chain requires a smooth flow of activities since it looks at satisfying the end user from production line.
Flawless supply chain mechanism would mean that the production line is risk free and all this is attributed to flexibility among other factors.