The cost savings associated with strategic
outsourcing not only give a business an edge over its
competition, but has
become crucial for the survival of many businesses.
From
the more obvious benefits of cost reduction and quality
improvement, outsourcing delivers a client a number of
advantages all the way up to value generation and
innovation capability in core competencies. The five key
improvement areas are:
1. Cost
The cost
benefits of outsourcing are obvious in terms of cheaper
labor and material costs. In case of variable sourcing
contracts, the costs can be reduced further in the form
of higher productivity of employees.
2. Quality
Most
outsourcing vendors have a better process maturity in
their core areas as compared to the client. As a result,
such vendors can deliver high quality products.
3. Time to Market
One of the
major benefits of outsourcing is to reduce the time to
market for any products or services of the client.
4. Focus on Core
Competencies
The whole
objective of outsourcing is to enable the client company
to concentrate on its core competence. By outsourcing
your products to a company that specializes in that
area, the client company significantly reduces its
management involvement in production issues, thereby
freeing such resources for core business activities.
5. Value Generation
In order to
extract more value from its products, the company can
measure the return on its investment. By doing so, it
becomes clear to both the vendor and the client as to
what are the key value parameters for the project and
for the outsourcing relationship. This in turn helps
both parties to monitor and plan for maximum value in
the engagement.
To summarize,
outsourcing can deliver a wide range of benefits to
clients, when they do it right. It is important, for
clients to clearly prioritize and rank their
expectations.
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There hasn't been a more compelling time to
outsource, especially, if:
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Your margins are under pressure, thanks to ever
rising manufacturing and labor cost. |
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You
would prefer to focus corporate energy on mission
critical issues. |
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Your current suppliers are getting too expensive and
not meeting your performance criteria.
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It
may result in savings to the tune of 50% - 100% (in
an apple-to-apple comparison)
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If
you wish for increase in bottom-line positive
results due to reduction in overhead, and increase
in productivity.
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To
succeed in outsourcing ventures, companies should follow
some basic guidelines:
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Agree on the scope of the contract.
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State at the outset what constitutes success. |
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Devise a contract that identifies the measurements to
gauge performance. |
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Maintain a flexible contract so each party can
easily adapt to change without major confrontation.
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Build a partnership that allows for negotiation and
communication. |
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Share goals, risks and rewards.
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Studies indicate that following factors are critical to
the effectiveness of a global trade strategy:
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Global trade structures and processes.
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Global sourcing business capabilities. |
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International language capabilities. |
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Top management commitment to global sourcing and
imports.
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Leather industry
occupies a place of prominence in the Indian economy in
view of its massive potential for employment, growth and
exports. There has been increasing emphasis on its
planned development, aimed at optimum utilization of
available raw materials for maximizing the returns,
particularly from exports. The key facts that make India
an attractive destination for
leather goods outsourcing are:
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The world’s
largest technically trained manpower in leather
craft is accessible at the world’s most competitive
costs. |
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India boasts
of 10% of the world's raw material production. |
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The current industrial
policy is very conducive to the promotion of the
Indian leather industry both in terms of domestic
trade as well as exports. Integrated tannery for
conversion of raw hides and skins into finished
leather is de-licensed. Except for a few items, many
sectors are de-reserved. |
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Decent
Infrastructure: International airports, well
equipped sea ports, and well placed communication
network. |
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Increasing
tannery activities and modernization of
manufacturing facilities. |
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Exports from India are likely to grow
as international brands have started outsourcing
products from India |
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Government paying considerable
attention to this sector. Export revenues expected
to touch US $ 4.5 billion by 2002. |
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Quality is GNN’s fundamental operating philosophy. We
never stop refining our business process to deliver
optimal overall quality of service.
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When you choose GNN as your outsourcing partner, the
global outsourcing benefits come to you at local
convenience. We have a sales office nearer to you
in USA reflecting our commitment to
make your business experience with us as comfortable and
profitable as possible.
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As
your outsourcing partner, GNN provides you a comprehensive
value service that includes but is not limited to
innovating, designing, consulting, prototyping, and
manufacturing. These services are complemented with our
excellent customer support. |
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When it comes to the sourcing of raw material, we have
well established relationships
with tanneries in
India
and abroad for the prompt and efficient sourcing of raw
material. We are able to provide our products made of
leather from multiple origins allowing our customers the
freedom to choose the best products to meet their
specific needs. |
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GNN
leverages on diverse resources available
in India to deliver you the world class product quality
– cost efficiently and on time. |
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GNN always relies on professional demeanor and courteous
customer service to win an opportunity to serve you. |
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GNN
recognizes the value of its human capital and fully
utilizes the abilities of every company employee.
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A corporate client looking for a custom leather solution.
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A manufacturer interested in outsourcing leather goods. |
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A wholesaler or retailer looking for a direct source in
Asia. |
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A
company engaged in promotional and marketing activities.
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A freelance designer seeking a manufacturer who would
meet her exacting specifications.
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