Outsourcing and Quality Management

Question: Discuss about the Outsourcing and Quality Management. Answer: Introduction: One of the crucial management strategies is Outsourcing which plays an important role in the progress of business organizations. There are a lot of activities in outsourcing; they are third party contracts, transfer of human resources and various assets to other companies, off shoring, transfer of the businesses from one to other stakeholders and many others. As per Lukic (2012), the primary objectives of outsourcing are giving a competitive edge to the organization by empowering and improving the business, to improve the core competencies of the business and to add value to the organization by reducing the cost of the operations. All these above mentioned aspects affects the performance development of the retail sector on the long term basis. As per Dolgui and Proth (2013), the definition of outsourcing is the act which obtains finished and semi-finished products or services from an outside company if the producers performed these activities traditionally and internally. There are many reasons behind the outsourcing like the focus and flexibility of the companies can be improved; the world-class capabilities can be accessed and the risk can be shared with a partner company. Many CEOs use to struggle to implement the outsourcing strategies in spite of knowing the advantages of outsourcing. As per Pyzik and Mar (2012), there are some biggest advantages of outsourcing according to the retailers and they are: high level of experience can be accessed by their companies; the workers become more talented and can think out of the conventional way; more resources can be gained and they become aware of the technology of art. However, along with many advantages and benefits, the retailers may face some risks which can affect the various business processes in a negative way. There are four areas which can cause the potential risks and they are I) competition II) lost of the production initiatives III) risks of transferring various products by ships and others in another companies IV) the numerous factors of strategies of offshore outsourcing (Dolgui and Proth 2013). In case of retail international company that operates overseas, the value of the company will be increased due to the impact of outsourcing (Lukic 2012). There are not much negative impacts of outsourcing strategies on the retail sector. For instance, where a third party is allowed to manage the business, it is easy for that company to gain access all the important data and information of the company and take the control over that company. According to Gaspareniene, Remeikiene, and Startiene (2014), there are three basic factors that can create an impact on the outsourcing process of a business. The first factor is the financial factors in which unexpected costs are dealt with. The second factor is the strategic factors in which the potential concentration loss on a businesss core activities and flexibilities are addressed. The third factors are other factors which includes the issues of safety and security and the in-house employee turnovers. The outsourcing of the non-core business activities of a retails sector can make sense as the main function of retail sector is to sale the products. However, the process of outsourcing in retail sectors is accompanied with risks. Quality Management Total quality management is an essential process of every organization. As pet the definition of quality management by Miller (1996), Quality management is an ongoing process where the management takes all necessary steps to include all the member of the organization in performing duties in order to achieve the objective and establish standards which is needed to meet the needs and expectations of the customers both internally and externally. The measurement of a firms success depends on various factors like how effectively they are managing and improving the quality of the business; how effectively the customers needs are satisfied; the maximization of the productivity by minimizing the costs; decrease the scrap and warranty cost from the operation; the increase in sales by the introduction of flexible prices; improvement of reputation; increase in profitability and many others. Quality is an important aspect to the small business retailers as they vastly depend on the good quality of goods and services to compete with their small as well as large competitors. Thus, quality can be considered as a strategic weapon or tool to get the competitive advantage over the competitors (Heckl et al. 2010). In order to get success and high profitability, the companies should follow five principles. They are measurement of performance, orientation of customers, continuous improvement, involvement of the employees, purchasing and supply management. The retail sectors have many factors that can have implications for quality. They are liability of products by reducing risks, relationship between the retailer and the suppliers, various practices of employees and the global effects of competition ability. Improved satisfaction of the customers, teamwork, productivity, effective communication and efficiency generates a lot of advantages in the retail sector and the retailers need to demonstrates their position in the market to gain these advantages (Idris, Mcewan, and Belvendram 1996). Now-a-days, some major challenges are faced by the retail sector. There are some CEOs and their subordinates who consider the management as the waste of time. According to them, setting up of functional and influential programs for the development of quality management is very mush difficult. Some solutions of these quality management issues are recommended for the insurance industry. As per Zaki (2010), one should emphasis on the need of creating awareness about the quality management department and there should have a specific budget for the quality improvement. As per the dissertation, there should be teaching and training session about the principles of quality for each and every member of an organization; the quality department should take the responsibility to resolve all the quality related issues. As per Zaki (2010), this process will cause in a large improvement in quality control and the company will be benefitted from this. References Dolgui, A., Proth, J. M., 2013. Outsourcing: Definitions and Analysis. Internal Auditor, [e-journal] 51(23/24), p 67696777. Available through: Dublin Institute of Technology Databasehttps://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=5868eee4-b37e-4371-9858-ffe40641da87%40sessionmgr110vid=24hid=115 [Accessed 26 October 2015]. Gaspareniene, L., Remeikiene, R., Startiene, G., 2014. Factors Determining Employment Outsourcing in Public and Private Sectors. Engineering Economics, [e-journal] 25(2), p 203210. 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A Working Definition for Total Quality Management (TQM) Researchers.Journal of Quality Management,[e-journal] 1(2), p 149. Available through: Dublin Institute of Technology Database https://web.a.ebscohost.com/ehost/detail/detail?sid=dbdab3bd-2663-420c-8a88-b7f5156b08ed%40sessionmgr4003vid=2hid=4112bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#AN=9611082635db=bth [Accessed 04 November 2015]. Pyzik, K., Mar, S., 2012. The Pros and Cons of Outsourcing. International Journal of Production Research, [e-journal] 69(2), p 21-23 . Available through: Dublin Institute of Technology Database https://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=5868eee4-b37e-4371-9858-ffe40641da87%40sessionmgr110vid=18hid=115 [Accessed 25 October 2015]. Total Quality Management in Malaysia. The TQM Magazine, [e-journal] 8(5), p 65-68. Available through: Dublin Institute of Technology Database https://www.emeraldinsight.com/doi/pdfplus/10.1108/09544789610146079 [Accessed 08 November 2015]. Williams, N., 1997. ISO 9000 as a Route to TQM in Small to Medium-sized Enterprises: Snake or Ladder?. The TQM Magazine, [e-journal] 9(1), p 8-13 . Available through: Dublin Institute of Technology Database https://www.emeraldinsight.com/doi/pdfplus/10.1108/09544789710159380 [Accessed 08 November 2015]. Zaki, A., 2010. Quality management and its role in development of the companies. Ph. D. International Virtual University.