Long term impacts among the strategic and the operational aspects pertaining to the supply and logistics management gaining an adequate competitive advantage within the framework of organization. Organization aims to achieve desired core competencies and focus on to meet the actual goals. The outsourcing helps in maintaining a proper link between the organization and customers, also, manufacturer and supplier. Provides measures in addition manage insights and in-depth studies accomplishing customers' needs, wants and satisfaction. However, outsourcing proves to be beneficial for the company to manage the stocks, transportation and furthermore, also, cost-effective. The key success factors will be ascertained to provide full information of the product with proper feedbacks so, which in turns helps the company to transform any change or introduce a new advanced product gaining the competitive advantage over other players in the marketplace. Outsourcing shows positive long term impacts for effective and efficient logistics and supplies function.
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The report will focus the effect of the outsourcing among the strategic and operational roles for the logistics & supply functional operations under an organizational framework to attain proper competitive state in the present market scenario. The organizational framework dissects the functions of the management handling the planning, organising, controlling and other operations. Therefore, they need to focus on logistics as it holds In order to obtain a competitive position a firm gain core competencies, therefore, with the help of different models the organizational operations will be analysed. Thereafter, the implication of the outsourcing or impacts on logistics and supply functions are there focussing upon the various approaches and logical issues relating to the supply chain management helps to gain proper expertise in an effective and efficient manner. The organization as a whole tends to manage all the operations significantly but, now day's the companies undertaking outsourcing practices to gain insights in global market, reducing cost of transportation, reducing conflict management, reducing risks and providing up to date information regarding the needs, wants and demand of customers. A number of examples from different companies going for outsourcing functions prove to be beneficial for both the company's. Thus, it helps in continuous improvement, innovation and differentiation taking proper measures to maintain high standards with quality assurance.
2. Organization Framework:
Organizational framework is determined where planning, organizing, staffing and controlling function are performed in a significant manner taking into consideration about the hierarchal level of the management. The proper communication and proper regulations over the duty standards are regulated and co-ordinated effectively between the different levels of management. The organization framework works on predefined strategies and goal oriented mechanisms to achieve a desirable position in the competitive market. In order to attain customer satisfaction, maintain shareholders values and sustain a competitive edge, value chain model proves to be beneficial for the firm to cope up with all the activities.
Primary ActivitiesFigure 1: Value Chain Model: Michael Porter
Human Resource Management
Source: Porter.M.E. 2001, Strategy and the internet, Harvard Business Review, [online], URL: http://www.cis.gsu.edu/~emclean/R0103Dp2.pdf
The primary activities deal with the values of the customer commencing the overall cost for achieving profit margins. These activities starting from the scratch -inbound logistics until the service support flows; introducing raw material to the manufacturer while transforming them into finished products, thereafter, proper warehousing and stock management followed by marketing and sales operations to satisfy the need and wants of the customers providing them proper support and feedback. The primary activities under the value chain model are entitled to gain proper support in terms of control system, recruitment selection and training of employees, provide technical support while procuring equipment and supplies Benton Jr.W.C., Handley.S.M. 2009. Thus, the organization core competencies can be determined while ascertaining value chain analysis but, they sometime lacks meeting the proper differentiation and cost advantage aspects Porter.M.E., Schwab.K. 2008-09.
The competitiveness and the low stability state among all the organizations now day's operates in the global and the regional marketing possessing some degree of pressures within the framework of organization, enforcing to restructuring of their strategies. Company's deals in the operational level while managing different structures. The competitive state of the organisation is ascertained by the five force model introduced by the Michael porter's, Lima.T,2006, explains the degree of the competition existing in the present market scenario influencing the profit of organization. The barriers to entry deals with economies of scale i.e. higher the production with low cost manage to reduce the competition. Bargaining power of the suppliers/buyers and rivalry determinants. There are many other models present in the current scenario focussing the competitive edge among the other companies helps in achieving competitive state among others.
Figure 2: Porters Five Force Model
Always on Time
Marked to Standard
Source: Lima.T. 2006, Michael porter's "five forces" Model, [online], URL: http://arfuso.weebly.com/uploads/9/9/6/1/996130/porters_5_forces_model.pdf
3. Impact of Outsourcing:
The organizational structure with the help of value chain, porters five force model and other models determines the operations of the management within organization framework, however, outsourcing now day's all the owners believe that the business flow at its best with trusted management. For example, Harley Davidson at York announces outsourcing operations which are not-core including stampings on small parts, assembling and chrome plate Crowe.P. 2009. Many companies depend upon the outsourcing organizations to perform the marketing and sales of products & services and many more but the most important among all are the logistics and supplies functions. Logistics and supplies are determined as managing strategic and operational functions regarding the procurement, warehousing and easy movement of the products or finished stock flowing from the manufacturer through proper channels of management adding to the marketing strategies of the organization. In the present market scenario high skilled workforce with large standards of logistics services are placed with goal oriented approach managing the distribution and supply management to third parties. By Introducing high class services; delivering an effective and efficient supply chain management for a smooth distribution channel while taking into consideration the customers perspective.
The term outsourcing in today's context is recognized by number of organization till date as the increase in the global economy and advancement of technology attract more and more firms to outsource their operations and therefore, add as a helping hand to reduce the capital investment and complications of management. The cost effective approach while identifying specialized outsourcing suppliers so, high standards of logistic and supply channels having long term stability. The long term factor is taken into consideration while choosing a organization, however proper plans are there to enjoy long term benefits to both the organization and the outsourcing body for adequate logistics & supply function Kim.D., Lee.R.P. 2010.
Ritter.T., Lutz.S. 2009, explains the need of the competencies regarding the outsourcing of the organization they are carry forward on the basis nature of firms so, the decision may vary in accordance to the nature and perception of the business based on the competencies and formulating proper links or connections with the outsourcing organization. Lorenzo.O et al 2010, explains that the improvement and advancement of the logistics and the supplies functions as the shift in the strategies of the organization in the current scenario's lay down some emphasis on highly efficient economy with adequate supply chain practices.
Outsourcing motivates the resource development in such a way so that, to ensure proper competitive advantage on the external capabilities and the internal capabilities of the organization in context with the capabilities of business as whole in terms of customer satisfaction towards the organization dealing with the innovative practises. When the companies are adapting the favourable conditions for the future concerns leads to the dual effect of outsourcing on supplies, when the degree of uncertain risks are removed by effective management practices and change mechanism prevailing current factors fosters the efficient framework attaining competitive advantage. The performance mechanism for the future prospective shows positive image on capabilities of competitive nature Gutierrez.L.G., Bustinza.O.F., Aranda.D.A., 2010.
The above study supports the title of the report as the long term impact regarding the strategic and operational roles of logistics and supply functions gain in-depth competencies under the framework of the organisation. Outsourcing is determined as important aspect for the organization as a whole, it acts as a helping hand generating more profits and reducing the investment capital. The framework under which organization performs as model of porters five force and the value chain is there to show the process of management but, in order to gain a competitive edge among the other global players in the market there is a need of an external body who are capable obtaining those competencies and therefore, accomplish a high standard of performance appraisal.
The implication of outsourcing manages long-term logistics and a supply function however, these falls under the strategic and the operational management excels towards the advanced technology and bridges a linkage between the benefits and performances of the outsourcing companies. Due to change in the demand and perceptions of the customers and other competitors the outsourcing firms are flexible enough to mould themselves to keep a pace with the current scenario. Change in the market lead to emergence of promotion and distribution on large scale altogether offering a quality services significantly.
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Thus long term impact tends to be positive if proper operations and strategies are formulated within the organization for better outsourced logistics and supply management.
Figure 3: Supply Chain Management
Source: IBM Global Business Service, "Supply chain Management Logistics services", [online], URL: http://www-935.ibm.com/services/us/gbs/bus/pdf/g510-3793-supply-chain-management-logistics-services-cost-effective-logistics-capabilities.pdf