Proposal of an outsourcing model for purchasing activities

International competition, constant innovation, and increased price pressures make companies look for new ways to increase profitability and competitiveness. These strong limitations help outsourcing to be a strategy. At the forefront in the United States and later in Europe not only But will reduce costs But also to create value by focusing on the company’s resources in important business activities While outsourcing of additional activities (Such as cooking, cleaning, safety, etc.) is a classic. Those involved in tasks such as IT, telecommunications, finance, transportation and procurement are new and expanding faster.

Previously it was used as a simple tool to reduce costs with financial and short-term vision. Outsourcing is a management tool that exists for managers today. If used correctly, this can lead to drastic changes in business processes, costs, and culture. On the other hand, if the device is not part of the true strategy reflection, it will not be able to operate in a planned and consistent manner, unless it is a matter of clear communication and intelligence, and if not specifically supported will Bad effect

In reviewing literature, we propose in the first part to present the characteristics and risks of employment . In the second part, we cover specific areas: employment, procurement, activities. From simple assignments to strategic procurement and / or purchasing processes that have the least added value, we will examine a variety of outsourcing formats such as strategic outsourcing and outsourcing operations.  The third part presents the results of a qualitative study from 6 case studies. All observations lead us to propose a survey Offshore outsourcing models of However this procurement .

1 – Outsourcing: definitions and risks

The word outsourcing has many definitions. The word outsourcing in English is the latest version. It was first used by the American Computer Press in the late eighties to describe the new trend of large companies moving IT services to external service providers. It also makes different French translations depending on the context: outsourcing options, outsourcing

Sometimes the term outsourcing is used. This is a new doctrine created by P.Y Barrere (1988) in the 1970s in order to have a wide range of features to call collaboration among suppliers, customers. This author has demonstrated the importance of long-term partnership and trusting relationships as compared to maximizing short-term personal interests.

7 Graver (1999) provides a more accurate definition: the transfer and outsourcing of internal business activities that are duplicates of the business are the power to make decisions relating to external service providers under the terms specified in the contract. In practice, activities are often transferred only But there are still factors of production, including resources that lead to repeated activity awareness: personnel, equipment installation, technology … and decision-making rights, which is the responsibility to make decisions about the transferred activities. This definition illustrates the complexity of the phenomena and risks inherent in the transfer of personnel and decision-making power. But didn’t say anything about the outsourcing company Broward and Morgan (2007) fulfilled the requirements with the following qualifications:

• Use and use of third-party resources, assets, and skills
• Measurement standards, requirements and value / cost ratio ratios of guaranteed quality and flexibility
• The purpose of the service is provided within the organization.
• By transferring existing employees to service providers;
• And / or changes or restores business processes and technology that are the basis of the business

2 – Context of outsourcing purchase

This section addresses procurement, challenges, limitations, and implementation contexts. The outsourcing purchase involves outsourcing all or part of the company’s procurement activities to a specialist service provider (Salz, 1989). This method is especially good for non-product purchases. (Telecommunication, transportation and logistics, marketing and investment communication, MRO, etc.) that are not suitable for the main business

Manufacturing purchases account for approximately 20% of all purchases, and sometimes 80% of the total number of suppliers. The lack of connectivity from diversity and production means they are often overlooked and therefore are a source of significant potential benefits.

The outsourcing of the purchase is mainly related to non-manufacturing purchases that are difficult to collect internally. In general, the purchase of “Class C” (low-cost and non-recurring strategic purchases) creates significant administrative expenses. Outsourcing does not involve partial and complete purchase functions. The purpose in this case is to reduce operating costs, get profit from the purchase. But gives buyers free time so they can focus on the buying process or value-added activities. Outsourcing also helps reduce the number of relevant strategic service providers

3 – Awareness of quality education

3.1 – Methods

interviews (face-to-face) were conducted in 2007 with all or part of experienced buyers / directors in order to perform theoretical analysis of outsourcing buying and to identify key concepts identified with ground-based reality. From suppliers that specialize in outsourcing of purchases, including hiring to buy Class C

These interviews provide an opportunity to highlight and understand the underlying motivation for purchasing decisions, analyze the systems implemented within the project framework, and identify the factors that contribute to operational failure or success.

This empirical study is based on qualitative methods in areas that are not intended to provide a comprehensive view of the practice in terms of outsourcing, not the model used. But helps us to focus on important points.

Sebastian

Sebastian was born and raised in the busy city of Abbottabad. As a journalist, Saad Mushtaq has contributed to many online publications including the PAK Today and the Huffing Post. In regards to academics, Saad Mushtaq earned a degree in business from the Abbottabad UST, Havelian. Saad Mushtaq follows the money and covers all aspects of emerging tech here at The Hear Up.Thanks