Question

Two automakers said separately that if Superior could not agree to the lower prices, they would go directly to Chinese manufacturers or turn to other North American wheel-makers. What are the disadvantages of outsourcing to a foreign country? Do you agree with outsourcing? Why or why not.

Answer 1

Some automakers agree to outsource the manufacturing of autos to foreign countries due to cheap availability of labor, and large natural resources, low production costs.

But is has some disadvantages also:

1. Management's Loss of control over the production costs which may lead to inferior quality products, higher costs and inefficient production production practices.

2. Communication barriers: foreign workers are generally not well versed with English and may not understand about product quality, costs and deadlines.

3. Dependence on supplier: the company gets so much dependent on the supplier to supply the goods,

that any setback to the manufacturing Co. Would effect supply chain management.

Yes I agree with outsourcing as it results in improved quality of products that too at lower prices which would increase sales of the company but the challenges should be addressed appropriately and specifically before the outsourcing is done.