Outsourcing Practices (Research Paper Sample)

A research on the effectiveness of outsourcing of apparel production from UK to China
Chapter 1: Introduction
1.1 Background
The concept of outsourcing has increased in popularity in the last decade. Outsourcing involves the process by which organisations acquire service and manufacturing needs and requirements that are expensive to own or not locally available. One of the key emerging issues in the global international market is an international outsourcing. Under this outsourcing category, organisations source and acquire services and raw materials, as well as manufacturing and production process with support from other international markets that have a competitive advantage (Zhang & Huang, 2012). The rise of this global business practice is based on the theory of national comparative advantage. The theory holds that nations have different competencies, and each develop a national comparative advantage over others due to its possession of a given production and economic resource, or the reduced cost of producing a given market product as compared to other global market competitors (Lee & Karpova, 2013).
Although the global outsourcing practice has spread equally across the globe, the developing nations in Asia and Africa have been the core focus of outsourcing services and factors of production for the western market organisations. In particular, China, as an emerging market and with the expected growth potential in the future has been a core beneficiary of the outsourcing practice, with key focus on its large supply of labour as well as a high population and market demand base (Olson & Wu, 2011).
Currently, the increased access to a deregulated global market has increased the competition intensity in the UK apparel industry. This increased competition has forced UK apparel firms’ desire flexibility in design, speed to market as well as low cost (Bhardwaj & Fairhurst, 2010). It can be seen that the UK apparel industry has been the most labour intensive sector over the years, with labour cost accounting for 40-50 percent of the final apparel cost (Miller, 2012). The high labour cost has caused many apparel firms to prefer outsourcing their production processes to other lower cost countries. In this regard, China has been known to be the best outsourcing destination owing to the presence of low cost labour. As such, the desire to reduce cost and to increase their competitive edge in the apparel industry has seen many UK apparel firms adopt the production outsourcing of their apparel to China.
Besides cost saving, outsourcing apparel production from UK to China also brings some other benefits for the UK apparel firms. For example, Chinese have a large population pool which represents a huge consumer market. Through outsourcing their apparel production from UK to China, these firms can easily access to and serve local market and achieve market expansion. Although, UK companies can get these benefits through outsourcing their apparel production to China, they may face some risks or challenges. For example, it may be difficult for the multinational corporations to monitor and control the production process of outsourcing suppliers, which may result in poor product quality and consequently impact the brand reputation (Oshri, Kotlarsky, & Willcocks, 2011). In this case, the research focuses on the study on effectiveness of outsourcing of apparel production from UK to China in order to help these apparel firms better make outsourcing decision and get high outsourcing effectiveness.
1.2 The Research Aim and objectives
This research study aims at investigating the effectiveness of apparel production outsourcing from UK to China. In order to achieve the above aim, this research proposal will focus on the following objectives
To review the concept of offshore outsourcing in the apparel industry context
To investigate the reasons behind the UK apparel industry outsources their apparel production from UK to China
To evaluate the benefits gained by UK apparel industry in outsourcing their apparel production from UK to China
To evaluate the challenges faced by the UK apparel industry in outsourcing their apparel production from UK to China
To provide recommendations for the outsourcing decision of UK apparel firms
1.3 Research Questions
In order to meet the study objectives in the study developed a series of questions for the study. In this regard, by responding and providing satisfactory answers, the study aim and objectives would be met. The study questions are:
What is the concept of offshore outsourcing?
What are the reasons behind the apparel industry outsourcing its production from the UK to China?
What are the benefits gained by the UK apparel industry in outsourcing their apparel production from UK to China?
What are the challenges faced by the UK apparel industry in outsourcing their apparel production from UK to China?
What are some of the recommendations viable for outsourcing apparel industry organisations in China?
1.4 Study Rationale
The global market is experiencing a rising market competition with the rise of an increasing number of multinational corporations. As such, in order to mitigate the high levels of competition in the market organisations are bound to focus on outsourcing strategies to reduce production costs, increase efficiency, and consequently expand their market quantity leadership and profit margins (Wang, Niu & Guo, 2013). This future market orientation requires an in depth analysis of the outsourcing practices and the common gains and challenges such ventures are likely to experience. Therefore, the study analysis will serve as a complementary tool through which outsourcing organisations can base their outsourcing strategies in a bid to increase success as well as reduce practice failure rates.
In addition, the use of the Chinese market is a crucial approach to evaluating the changing dynamics and the future of outsourcing practices in China. Traditionally, a majority of the organisations outsourced labour from China as it was perceived a cheap labour, thus reducing production costs. However, as Meng (2012) stated, the labour market dynamics in China have changed with rising unions, labour regulations, and rising cost of labour and competition. Thus, the study analysis forms an analysis of the current and future situation of outsourcing in China, evaluating both expected trend changes as well as potential challenges.
Finally, the use of the apparel industry is a vital focus industry as it involves outsourcing of labour and production in China. Thus, its evaluation will provide a framework of changes in the labour and market outsourcing practices in China. Therefore, its evaluation provides the study with a focus on the two key dimensions of labour and product markets in China. This will provide a basis through which, other industrie...