What is Outsourcing?

Filed in archive Basics on March 10, 2004

Outsourcing has been the norm of manufacturing companies for a long time. U.S., Canada, australia and Europe-based manufacturing companies have been using offshore suppliers to produce items:

- involving hard labor production process
- posing environmental damage
- requiring extensive warehouse
- having raw material geography deliverance issues

At the beginning, only the manufacturing of limited physical products, such as apparel, furniture and electronic goods are outsourced. Now, it's almost anything you can think of, thanks to the advancement of Internet and other technologies.

In a nutshell, "outsourcing" is the usage of outside resources to create tangible or intangible products or to assist the existing business divisions for efficiency purposes. Most companies that use outsourcing suppliers chose to do so in order to cut costs.

In the latest trends, U.S. companies send off their jobs to overseas suppliers (offshore). Among the favorite outsourcing destinations are:

- China
- Mexico
- India
- Australia