MBA
OUTSOURCING- SCM FULL TOPIC.docx

5 favourable government policies there are some

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5. Favourable Government Policies There are some governments that grant special exemptions and incentives to companies that invest in their economy. These include tax exemptions and access to cheap credit which could improve the bottom- line of the business. Disadvantages of Offshoring 1. Loss of control 2. Increased Unemployment - The biggest criticism versus companies that offshore is that it increases the level of unemployment of the local economy. 3. Cultural and social differences - The client will be immersed in the culture and social practices of the host country. This may have an effect on productivity and communication. 4. Security issues - W henever you are sharing, transmitting data to another party, you are always at risk of security breach and compromised data integrity What is back shoring Reshoring (also known as onshoring , inshoring and backshoring ) is the act of reintroducing domestic manufacturing to a country. It is the reverse process of offshoring. For the last twenty years, American companies have been " offshoring " manufacturing to low cost countries such as China , Malaysia and Vietnam . In 2010, a group of manufacturers started the Reshoring Initiative, a movement focusing on bringing manufacturing jobs for American companies back to the country. [1] The Reshoring Initiative reports that 140,000 American jobs were lost in 2003 due to offshoring. Eleven years later in 2014, the United
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States recovered 10,000 of those offshored positions; this marked the highest net gain in 20 years Success stories Companies such as ET Water Systems, GE Appliances and Caterpillar found that with the increase of labour costs in Japan and China, the cost of shipping and custom fees, it cost only about 10% more to manufacture in America. Advances in technology such as Digital Manufacturing and Automation have made bringing manufacturing back to the United States both cost effective and possible. Especially advances in 3D printing technologies bring manufacturers closer to their customers. Adidas, for example, plans producing highly customized shoes with 3D printers in the U.S. With this advanced technology companies are creating new innovative products for the U.S. market. In the United Kingdom , companies have used the reintroduction of domestic call centres as a unique selling point . In 2014, the RSA Insurance Group completed a move of call centres back to Britain. The call centre industry in India has been hit by reshoring, as businesses including British Telecom , Santander UK and Aviva all announced they would move operations back to Britain in order to boost the economy and regain customer satisfaction.
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  • Summer '13
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