Sourcing In and Out: The Competitive Position of Small and Medium Scale Entrepreneurs
Mentor 1
Avik Chakrabarti
Location
Union Wisconsin Room
Start Date
5-4-2019 1:30 PM
End Date
5-4-2019 3:30 PM
Description
Much of our society’s well-being today is centered around commerce: reducing frictions from interactions between people and businesses keep our economy running and ensure that consumers quickly receive the goods and services that they need. As the world becomes increasingly fast-paced, firms are augmenting their production capacity by outsourcing parts of their business processes to outside contractors in order to reduce operating costs and increase efficiency. A vast and growing body of economics literature continues to examine the causes and consequences of outsourcing. With this scholarship, I examined the role of outsourcing inWisconsin, using firms operating in the medical industry as examples. In order to picture how and why Wisconsin medical industries outsource, I have focused on analyzing three representative firms that have used, and/or currently use, offshore outsourcing in order to expedite some of their tasks. My research methods include interviewing each company’s associates who initiated decision(s) to outsource, as well as evaluating profit and productivity data from each firm before, during, and, in one instance, after outsourcing in order to assess how each company’s business activities were affected by the addition of outsourcing processes. I found that while outsourcing can significantly improve a company’s output capacity, the success of outsourcing implementation is strongly correlated with the scope of the contracted firm’s involvement in the internal activities of the owner firm. If the owner firm does not maintain strict monitoring over what activities the contracted firm is and is not responsible for, and, similarly, if the owner firm does not maintain sole control over its own core internal activities, outsourcing can lead to costly errors. This led me to conclude that outsourcing can indeed represent a worthwhile investment for Wisconsin medical firms, provided the owner firms clearly define and monitor the tasks and expectations of the contracted firm.
Sourcing In and Out: The Competitive Position of Small and Medium Scale Entrepreneurs
Union Wisconsin Room
Much of our society’s well-being today is centered around commerce: reducing frictions from interactions between people and businesses keep our economy running and ensure that consumers quickly receive the goods and services that they need. As the world becomes increasingly fast-paced, firms are augmenting their production capacity by outsourcing parts of their business processes to outside contractors in order to reduce operating costs and increase efficiency. A vast and growing body of economics literature continues to examine the causes and consequences of outsourcing. With this scholarship, I examined the role of outsourcing inWisconsin, using firms operating in the medical industry as examples. In order to picture how and why Wisconsin medical industries outsource, I have focused on analyzing three representative firms that have used, and/or currently use, offshore outsourcing in order to expedite some of their tasks. My research methods include interviewing each company’s associates who initiated decision(s) to outsource, as well as evaluating profit and productivity data from each firm before, during, and, in one instance, after outsourcing in order to assess how each company’s business activities were affected by the addition of outsourcing processes. I found that while outsourcing can significantly improve a company’s output capacity, the success of outsourcing implementation is strongly correlated with the scope of the contracted firm’s involvement in the internal activities of the owner firm. If the owner firm does not maintain strict monitoring over what activities the contracted firm is and is not responsible for, and, similarly, if the owner firm does not maintain sole control over its own core internal activities, outsourcing can lead to costly errors. This led me to conclude that outsourcing can indeed represent a worthwhile investment for Wisconsin medical firms, provided the owner firms clearly define and monitor the tasks and expectations of the contracted firm.
