The impact of outsourcing on supply chain and operational effectiveness.

Abstract

This study was aimed at finding solutions that ensure efficient and effective organisational structures that are agile to the changing market pressures. In order to understand the relationship between productivity and efficiency, a dual approach was used. The study focused on the core competencies that an organisation can undertake to initiate cost effective operations and premium service delivery to its customers. This could have an impact on the customer excellence and competitiveness in the industry. A sample was drawn out of a population of 150 respondents to ascertain and identify the drivers that force organisations to change their operational thinking about outsourcing. Furthermore, a case study was used to explore the impact of outsourcing, to ascertain whether it can lead to improved efficiency in the supply chain. The questionnaire was used as the data collection instrument that would complement the literature of this study. The study revealed that outsourcing can positively impact on the cost effectiveness nature of a supply chain and the operations of an organisation. The research project found there are certain drivers that influence the decision making of business leaders of the organisation. The study found that the outsourcing of certain activities within the organisation can improve workflow of goods and services. An increase rate of worker productivity can enhance service delivery downstream of the supply chain and ensure a higher degree of customer satisfaction. It would be recommended that supply chain manager review the core competencies within the structure and focus on outsource service provider to strengthen it where there is a lack in expertise.