China Sourcing Direct

Advantages of Direct Sourcing


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Accelerate re-engineering benefits
. Re-engineering aims for dramatic improvements in critical measures of performance such as cost, quality, service and speed. But the need to increase efficiency can come into direct conflict with the need to invest in core business. As non-core internal functions are continually put on the back burner, systems become less efficient and less productive. By outsourcing a non-core function to a world-class provider like China Sourcing Direct, the organization can begin to see the benefits.
Free resources for other purposes. Every organization has limits on the resources available to it. Outsourcing permits an organization to redirect its resources; most often people resources, from non-core activities toward activities, which serve the customer. The organization can redirect these people or at least the staff slots they represent onto greater value adding activities. People whose energies are currently focused internally can now be focused externally - on the customer.
Improve company focus. Outsourcing lets a company focus on its core business by having operational functions assumed by an outside expert. China Sourcing Direct can free your resources from areas that are not your expertise and leave you to focus on meeting your customers' needs.
Make capital funds available. There is tremendous competition within most organizations for capital funds. Deciding where to invest these funds is one of the most important decisions that senior management makes. It is often hard to justify non-core capital investments when areas more directly related to producing a product or providing a service compete for the same money. Outsourcing can reduce the need to invest capital funds in non-core business functions. Instead of acquiring the resources through capital expenditures, they are contracted for on an "as used" operational expense basis. Outsourcing can also improve certain financial measurements of the firm by eliminating the need to show return on equity from capital investments in non-core areas.
Reduce operating costs. Companies that try to do everything themselves may incur vastly higher research, development, marketing and deployment expenses, all of which are passed on to the customer. An outside provider's lower cost structure, which may be the result of a greater economy of scale or other advantage based on specialization, reduces a company's operating costs and increases its competitive advantage.
Reduce Risk. Tremendous risks are associated with the investments an organization makes. Markets, competition, government regulations, financial conditions and technologies all change extremely quickly. Keeping up with these changes, especially those in which the next generation requires a significant investment, is very risky.
Reduce Internal Resources. Companies outsource because they do not have access to the required resources within the company. Outsourcing is a viable alternative to building the needed capability from the ground. New organizations, spin-offs, or companies expanding into new geography or new technology should consider the benefits of outsourcing from the very start; we here at China Sourcing Direct are here to help you achieve this.

 

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