Offshoring…Operations Management

G r o u p – “ 8 ”

Agenda• Offshoring

• Why Offshoring?

• Commonly Offshored Streams

• Advantages & Disadvantages.

• About the case:– Facts – Issues– Suggestions

Offshoring

• Allocation of specific business process to a specialist external service provider.

Why Offshoring?• Lack of expert-labor in some portions of the

business process.

• Availability of cheaper labor, whilst not comprising on the quality of output.

• Ability and feasibility to concentrate on the other crucial business process.

Offshoring

Manufacturing

IT Support

Accounting

Offshoring Streams• Content Development

• Web Design and Maintenance

• Recruitment

• Logistics

• Technical/Customer Support

Advantages & DisadvantagesAdvantages

• Swiftness and Expertise

• Concentrating on core process rather than the supporting ones

• Risk-sharing

• Reduced Operational and Recruitment costs

Disadvantages

• Risk of exposing confidential data

• Synchronizing the deliverables

• Hidden costs

• Lack of customer focus

ABOUT THE CASE• Facts:

– Sales was increasing constantly along with the cost.– Such an increase led them to shift to low cost region.– Campaign in the name of “Keep Castle Bridge British”

was being led by trade unionists, media & celebrities.– There was negative reaction to “Made in Malaysia”.– Raw materials were coming from all over the world.– Owners of Castle Bridge are from everywhere &

Britishness is not their priority but profit is.– Initially it was a niche market but then it started

considering all the segments of the society.

• Adding headquarter jobs constantly.• British Economy was loosing 30 million working

days annually due to labor disputes.• Decline in no. of employees in manufacturing

industry which were:

Male

Female

31 % 18%

17% 6%

Issues• What about the staff?

• Whether to go for a fiscal strategy or people strategy?

• Threat to company’s reputation as British brand.

• Shoppers reaction to goods “Made in China”.

Suggestions• Strategic plan:

– Headquarters are in London.– Production in low cost region.– Goods were being sold through retail outlets.

• Revamp and global reach for the brand.• Communicate management intentions & motives.• Rebuild employees confidence & trust.• Make a tag-name as:

– “Design in England”;”Made in Malaysia”

Sugguestions (Contd.)• Company should go for Operational Restructuring.• Clear about its strategy & objectives.• Share its goals & values with shareholders.

CONCLUSION

Company should go for “Offshoring” because global doesn’t means shedding you heritage & being British doesn’t mean one can’t have officials or workers from other parts of the world.

THANK YOU

PRAFUL ANCHALIYA

SHALLY RATHI

SANYAM SINGHAL