Interest in supply chain partnerships and alliances has increased in recent years as companies restructure their businesses around core products and core activities. Related to this trend is the trend towards outsourcing non core competencies to business partners. It is the tough competition in core competencies, for scarce resources and the increasing cost of staying competitive across all activities, which is driving firms to distinguish which operations and capabilities are key to their business – and which ones they should outsource.
Outsourcing is a term that has become popular within industry, but whose advantages can be elusive. It is often used to refer to a multitude of differing practices and business arrangements, some strategic and some which are clearly not strategic, such as sub-contracting. Quite often managers fail to fully appreciate the long term and high levels of commitment associated with true strategic outsourcing.
Getting full value out of supplier relationships is an elusive goal for most companies, even those with robust supply chain management programmes. Partnerships and relationships must become embedded within an organisation’s overall strategy. This is particularly true if the full benefits of strategic outsourcing are to be achieved.
This module seeks to generate an understanding of outsourcing and strategic partnering within a supply chain context. It will highlighting the challenges involved, and route maps for success and the potential rewards.
Evaluate the Outsourcing Decision: Outsourcing as a business trend, including product and services, BPO and ICT. The Value Chain implications of outsourcing. The rational and drivers within a global business environment.
The Make or Buy decision: Examine the strategic & operational implications of outsourcing initiatives in relation to the aims, scope, costs, benefits and risks. Evaluate the outsourcing decision from a strategic resources perspective, including TCE, RBV and the knowledge based.
Outsourcing Frameworks: Examine the network of decisions that have to be evaluated before a final decision can be made, e.g. planning, risk, core competency. Compare and contrast available processes & match to outsourcing initiative. Examine each aspect of process. Negotiation
Transferring: How is the product or service transferred, the implications, TUPEE, change management
Managing the Outsourced Relationship: Arms length vs Collaborative relationships, supply chain relationships.
Alignment theory. Rational for seeking partnerships. Forming strategic partnerships and alliances. Strategic relationships in logistics.
Strategic partnering: Interdependence indicators and assessment; relationship/response issues as a function of the extent of the relationship; Strategic partnering methodology; Supplier-distributor joint planning activities; Problems in supply chain partnerships; Supplier development.
The teaching methodology will apply a student centred learning approach, which will assign significant responsibility to the student in the learning process. The module also incorporates a range of learning and teaching methods including: lectures, class assignments, class discussion, guest speakers, case studies (best practice) and negotiation exercises
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