Outsourcing in Electronics Manufacturing - Does It Work - Essay Example

OUTSOURCING IN ELECTRONICS MANUFACTURING - DOES IT WORK? Outsourcing In Electronics Manufacturing - Does It Work? Affiliation Table of Contents Outsourcing within the Electronics Industry 4 Prospects of Outsourcing Electronics Industry 5 Does It Work? 6 Effect on the Workers 7 Conclusion 8 References 9 Introduction Outsourcing is a latest emerging trend round the globe. Basically, the term ‘outsourcing’ refers to the agreement between two organizations to offer services that a business organization can otherwise carry out using its own corporate resources. In fact the majority of organizations (i.e. multinational or national) at the present contract or outsource their business services for instance call center services, electronic mail services and payroll. In addition, these services are divided among different companies that are well experienced in providing services and facilities. However, these organizations are sometimes located out of the country (Thompson, 2011; Turban, Leidner, McLean, & Wetherbe, 2005). In this scenario, the outsource manufacturing expansion is as a great deal a return to essential competencies as it is an attempt to reduce operating expenditures. In addition, the enhancement of external knowledge has been particularly apparent in electronics manufacturing, which has basically turned into the shape of an outsource business model. Additionally, from circuit boards that present a wide variety of services and functionalities to wireless communications units to the insertion of micro electromechanical (MEM) sensors in a plethora of problem-solving and diagnostic devices, to a greater extent refined devices and electronic components are being contract manufactured. Hence, it allows electronics manufacturers to pay attention to what they do best at the same time as addressing the clinical needs of customers (Teng, 2012). In the past few years, there has been extensive progress in outsourcing in electronics manufacturing. We have seen that, a lot of original equipment manufacturers (OEMs) have adopted this modern trend in order to quickly and cost efficiently enter into new marketplaces. In addition, by teaming with a knowledgeable partner, an OEM could considerably reduce the time as well as operating expenses implicated in developing new services and products like that Microsoft did in its launch of the Xbox (Delattre, Hess, & Chieh, 2003; Teng, 2012). This paper presents a detailed analysis of some of the important aspects that are associated with outsourcing in electronics manufacturing. The basic purpose of this research is to analyze how outsourcing in electronics manufacturing offers advantages and support for business cut down overall cost and enhance potential profitability of the business. This paper will present an overview of outsourcing with respect to the electronics industry and also present a critic, whether or not outsourcing in electronics manufacturing helps the business. Outsourcing within the Electronics Industry All through the world, businesses, manufacturing and industries outsourcing is not a new idea or trend for Original Equipment Manufacturers (OEMs). It is basically a “make v/s buy” assessments and decisions that have been around for businesses and manufacturing industries for a long time. In fact, it is not easy to find out a business that completely manufactures its own electronic items and products currently. However, it is also a fact that the outsourcing is relatively a new idea for electronics manufacturers industries (Delattre, Hess, & Chieh, 2003; Teng, 2012). In addition, an amazing flow in electronics manufacturing outsourcing actually started in the mid 90s and sustained throughout 2000s. All through this evolutionary period, a large number of huge technology original equipment manufacturers were getting their manufacturing policies to benefit from the wave of outsourcing substitutes that were easily accessible to them, to both improve the quality of their products and minimize asset and operating expenses. In current challenging and ever-increasing competitive financial atmosphere where the available marketplace is behind with the most counts more than 10 percent over the past 3 years, the manufacturing market insider determines the electronics manufacturing services (EMS) marketplace at $92.7 billion, that is 5.4 percent lesser than the previous year, less than half the decrease in accessible marketplace (Delattre, Hess, & Chieh, 2003; Teng, 2012). It is clear from the above discussion that as end marketplaces have softened stridently all through the current downturn, original equipment manufacturers move in the direction of outsourcing, and therefore the EMSs share of the available marketplace carry on to raise. However, these days’ expansion dynamics are extremely different from those of immediately a few years ago (Delattre, Hess, & Chieh, 2003; Teng, 2012). Prospects of Outsourcing Electronics Industry The ever-increasing competitive electronics business manufacturing market requires the suppliers to offer inexpensive, greater quality services and products to their clients in a straightforward fashion. Basically, the need for the reduced product life cycles and always growing worldwide rivalry have forced the customary manufacturers to pay attention on their business fundamental competencies, like that development and product design, selection of outsource real electronic manufacturing of their products to contract business manufacturers. However, the choices to outsource are able to have both optimistic and unfavorable influences on the main aspects of the electronics manufacturing supply-chain. In this scenario, one optimistic influence is that the manufacturer’s supply chain agility is augmented. In addition, the outsourcing has caused an increase in the amount of data and information that is shared among supply chain associates. Hence, a higher confidence in suppliers and alliance partners has turned out to be essential for business endurance (Mason, Cole, Ulrey, & Yan, 2002; Delattre, Hess, & Chieh, 2003; Teng, 2012). Does It Work? A lot of researches show that no particular business in the current worldwide market is capable of understanding the marketplace prospects in a cost-effective and timely way, mostly because of lack of solid abilities and experience bases. When contract manufacturers and electronics outsourcing firm work jointly to tie together the mutual knowledge of both parties, the outcome probably is influential. In addition, a large number of businesses are at the present selecting to outsource most of their products to other businesses that concentrates on manufacturing products. Additionally, outsourcing will be one of the most significant aspects in the future supply chain management. In fact, an excellent supply chain is one that improves the worth of interior tasks by building up powerful partnerships that guide to high value outside tasks. The most significant aspects that facilitate the persistence of this tendency comprise shortened product life cycles, growing worldwide struggle, cost minimization attained throughout the huge volume procurement of products and consumables, and improved consumption of high cost resources communications. It can be considered as an idea of agility as the capacity to react rapidly and successfully to please clients (Maureen, 2012; Mason, Cole, Ulrey, & Yan, 2002; MacWilliams, 2011). In addition, the electronics manufacturing agility has turned out to be a most important element of competition in the business industry nowadays. In this scenario, businesses have to rapidly recognize, design, produce, and deliver products that convene client requirements, at the same time as minimizing operating cost as well as improving quality standards. Moreover, special attention is being paid on agility in scenario of developing a wide range of inexpensive and high-class products with short lead times in changing sizes and client requirements (Maureen, 2012; Mason, Cole, Ulrey, & Yan, 2002; MacWilliams, 2011). Effect on the Workers This section discusses the influence of outsourcing in electronics manufacturing that it has caused to workers who were laid off. Due to extensive developments and increasing outsourcing electronics manufacturing has faced severe jobless conditions in a number of nations. In this scenario, a large number of jobs were created in Asian nations (due to inexpensive human resource) and huge downsizing for human resource seen in European nations. This trend has also established critical jobless conditions in such nations. This is one of the biggest side effects of outsourcing in electronics manufacturing (Maureen, 2012; Mason, Cole, Ulrey, & Yan, 2002; MacWilliams, 2011). Conclusion Outsourcing is a latest emerging trend round the globe. Basically, the term ‘outsourcing’ refers to the agreement between two organizations to offer services that a business organization can otherwise carry out using its own corporate resources. In fact the majority of organizations (i.e. multinational or national) at the present contract or outsource their business services for instance call center services, electronic mail services and payroll. The outsource manufacturing expansion is as a great deal a return to essential competencies as it is an attempt to reduce operating expenditures. In the past few years, there has been extensive progress in outsourcing in electronics manufacturing. We have seen that, a lot of original equipment manufacturers (OEMs) have adopted this modern trend in order to quickly and cost efficiently enter into new marketplaces. The electronics manufacturing agility has turned out to be a most important element of competition in the business industry nowadays. This trend has also established critical jobless conditions in such nations. This is one of the biggest side effects of outsourcing in electronics manufacturing. References Delattre, A., Hess, T., & Chieh, K. (2003). Strategic Outsourcing: Electronics Manufacturing Transformation in Changing Business Climates. Retrieved March 26, 2012, from http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN015115.pdf MacWilliams, J. (2011). A Roadmap: The Present and Future of Electronics Manufacturing in Advanced World Economies. Retrieved March 25, 2012, from http://www.connectorsupplier.com/tech_updates_JM_Roadmap_Part2_4-19-11.htm Mason, S. J., Cole, M. H., Ulrey, B. T., & Yan, L. (2002). Improving electronics manufacturing supply chain agility through outsourcing. International Journal of Physical Distribution and Logistics Management, Volume 32 Issue 7, pp. 610-620. Maureen. (2012, January 31). Outsourcing Electronics Manufacturing To Asia. Retrieved March 25, 2012, from http://www.ormester.tv/outsourcing-electronics-manufacturing-to-asia Teng, A. (2012). Electronics Outsourcing. Retrieved March 24, 2012, from http://www.mpo-mag.com/articles/2004/01/electronics-outsourcing Thompson, T. (2011, April 04). What is Outsourcing? Retrieved March 22, 2012, from WiseGeek.com: http://www.wisegeek.com/what-is-outsourcing.htm Turban, E., Leidner, D., McLean, E., & Wetherbe, J. (2005). Information Technology for Management: Transforming Organizations in the Digital Economy, (4th ed.). New York: Wiley. Read More