Through the years, economics had and will continue to influence a significant part of our lives. Be it within the world’s super countries like the United States, China, Russia, Japan, Germany and the like or within the continuously blooming areas of Asia, particularly in the Southeast Asian countries like the Philippines, economics is considered an extremely important element in determining how they are able to flourish as a nation, especially when compare to their neighboring countries.
Aside from the export of goods, manufacturing of local products and tourism, businesses often comprise the bulk of a country’s economic growth. As time passed, the relevance of business growth and the impact it had on a nation’s economy had been very evident. And along with it, the types as well as the classifications of businesses had also widened. Not only were businesses intended for the sale of goods and services anymore, but they have also covered an even wider spectrum of coverage. Furthermore, there are a number of business types or structures that are widely known in the world. Examples of these include: Sole proprietorship, which is the most common form, General and Limited Partnerships, Corporations (either profit or non-profit), Companies, Trusts and Ventures. The world currently has an innumerable number of businesses that continuously build worldwide economy.
Another example of a widely used business structure or practice is that of “outsourcing”. According to the Merriam-Webster dictionary, to “outsource” means to procure goods or services under contract with an outside supplier. It refers to the way in which companies entrust the processes of their business functions to external vendors. One good example of this would be the Business Process Outsourcing Industry or commonly referred to as BPOs. Outsourced functions that are generally handled by BPOs include day-to-day operations as in the case of call centers or contact centers which usually includes transaction processing, payrolls and orders, inventory management, as well as frontline functions such as customer service or technical support.
Like all other business structures, outsourcing also has its own advantages and disadvantages. The most obvious advantage of outsourcing would be the cost or profit aspect. It has been by far, the most visible benefit of outsourcing. Companies who use outsourcing especially for processes and functions that are done in offshore locations tend to have the highest returns as compared to other business structures. This is most true in the case of offshore contact or call centers, especially ones located in India and the Philippines, where they are most prevalent. Work functions and processes are done at a surprisingly lower cost and with great quality as well. Due to the difference in wages between most Western countries and Asia, the same functions that are done in the United States, for example, could be done with substantially lower cost when done in India which would translate to higher profit. Although a significant amount of time would be needed especially in training those that would be handling the operations on the offshore location, by constantly monitoring day-to-day operations in these offshore locations, companies would be able to ensure that low-cost would not equate to low work quality. The use of outsourcing also allows companies to put more focus on building their brand(s), whether it be through marketing strategies or with the aid of Research and Development. It also ensures efficiency as outsourcing creates opportunities for leverage especially with resources. Additionally, companies who utilize outsourcing services are also provided with stable results as most offshore outsourced companies operate nonstop.
On the other hand, as good as outsourcing might be, there are still disadvantages to it. First and foremost, losing management control of outsourced business functions could mean that the company no longer has control over day-to-day operations as well as deliverables. There is also the risk of losing sensitive information and breach of confidentiality especially in the case of single companies providing service to two or more clients (companies).
The feasibility of using outsourcing largely depends on the type of services or goods that each company or organization offers. For example, in the case of companies focusing on the production of goods, outsourcing might not be the best solution. The company has to take into account how they be able to procure materials on an offshore location, whereas if they were to keep it in-house, then the company would have easier access to such resources and substantially keep their market advantage over their competitors. However, in the case of companies specializing in the distribution of services, or those that require frontline manpower as in the case of telecommunications companies, for example, then outsourcing may be a plausible idea, particularly for functions that involve customer service or technical support.
The world has rapidly undergone a lot of changes in practically everything during the past few decades. The most significant changes could be observed in the field of medicine, research, agriculture, education and of course, technology, to name a few. In the field of economics, the prevalence of technology over manpower as the capital resource is now the evident trend. We also continue to witness changes on how the world faces subjects such as socio-cultural norms which includes subtopics such as religious freedom, gender equality, racial and/or ethnic disparities, human & animal rights and politics. Each topic has its own share of advantages or disadvantages, but these, unfortunately, are not going to be discussed in this paper.
A plethora of changes have been witnessed by the world in the field of technology. Along with new practices, advances made in technology have proved to be a continuously influential aspect of today’s living. What were seemingly impossible to do in the past three or four decades are now just a part of our everyday existence; from cellular phones, handheld devices of all sorts, supercomputers, as well as medical equipment and treatments to space travel and robotics.
All of these advances in technology are beneficial in its own right. Technology allows for more flexibility in carrying out a myriad of tasks, whether it be at home or in the industrial sector. The use of technology in the industrial sector equates to a more stable flow in production. It also substantially cuts down on manpower cost in the long run as maintenance significantly costs less than sustained manpower compensations. It also allows countries to cultivate an even more prosperous economy. Advances made especially in the field of agriculture has aided not only in the increase in production but also in providing relief to one of the world’s most prevalent problems: hunger, albeit very gradually. With current telecommunications, reaching out to people from the other side of the globe is now a very simple task. Cellular phones have also evolved from luxury items to household necessities. Aside from being used solely for communication, it could now perform a wider variety of functions, most notably, data storage.
It could not be denied that we are now very dependent on technology. It has profound effects in all aspects, encompassing all ages, basically, all of mankind. For example, children nowadays are most likely exposed to technology at a very young age. Although it is not dangerous per se, the use of such would still have repercussions. Usage of technology at such young ages could mean decreased tendencies in developing social skills as well as less opportunities in using their imagination. Use of technology as in the case of computer games, albeit beneficial at some point, more often than not, lead to decreased physical activity, which then leads to the development of certain illnesses or conditions.
Generally speaking, the use of technology does not immediately imply or connote a negative effect. We just have to be more responsible in the use of it.
The Internet of things is the concept of connecting any device with an on and off switch to the Internet and/or to another device. Every item as long as it has that switch, is considered viable. Given the current number of items of such nature being used, we would imagine a seemingly endless number of permutations as to how each one could connect to another and how many more there would be in the future. It emphasizes not just the connectivity of such items but also the connections that we, as humans could establish with other humans and with these items as well. The Internet of things allow for virtually infinite possibilities and connections that lead to a significant influence in every aspect of our lives – at work, at home, anywhere (Morgan).
A supply chain is a string of processes that encompass the following three functions: 1) Supply of materials to a manufacturer; 2) the manufacturing process and 3) the distribution of completed goods through a network of distributors and retailers to consumers. A supply chain is important especially in terms of economics as it ensures that the goods that the consumers need or want are obtained. Procurement of raw materials to be used for production consumes not just time but valuable resources, even manpower. For a company that manufacturers the goods, if they were also the ones who directly gathered the materials, it would just add up to their production costs. And given the current state of competitions in the market, even a slight increase in production costs or even retail price markups could end up in favor of the opposing company. The supply chain also allows for such products to reach their intended markets, a process that often involves an insane amount of time if done by a single company only. However, since there is a supply chain in place, people would have an easier time finding out where to find certain items that they need.
The World’s shift from the industrial age to the electronic or digital age has brought forth many changes in the way people do business. Before, the main capital in production is human resource and the work force. The businesses that flourish are those who have huge numbers of laborers. Nowadays, information has already been the key commodity of the world. Companies who have great hold of the biggest knowledge and information banks are the ones who go on top. This is the main mistake of my friend in thinking that Supply Chain cannot add value to a company. Supply Chain is basically founded upon information. The whole industry of Supply Chain runs and revolves around a huge numbers of information. This gives rise to the economic implications of Supply Chain. My friend, just like other people have the misconception that Supply Chain only “moves things around”. Dwelling unto all the elements of Supply Chain, it is more than just that. Supply Chain functions under several different systems in order to successfully complete operations. These systems include Enterprise Resource Planning, Customer Relationship Management, Supplier Relationship Management, Warehouse Management, and Transportation Management. Just by looking at these systems, one could already disprove what my friend said because these systems show a cyclical, and not just a one two-way process. Supply Chain involves processes that will ensure the systematic flow of operations. Such processes are well planned, and are laid out intricately to see to it that the expectations and needs of the customers are met, and surpassed even.
Secondly, Supply Chains operate globally. The function of the Supply Chain industry is well regarded in the field of Logistics, by different aspects of the society such as in documentation, language, and even in politics. By integrating Supply Chains in global systems operations, companies and organizations have the access to assurance, greater visibility, more control, and less variability within. Supply Chains do not merely move things around, it addresses the complexity of these things and creates strategies to make activities and operations within the company efficient and organized. Supply chains maintain the healthy balance in the competition that arises in the market, thus helping industries sustain and thrive in their operations.
Third, Supply Chain does not just pass things around, it maintains links and keeps in touch with its clients, promoting collaboration and satisfaction between parties. Supply chains create, maintain, and execute strategies that will help it maintain its connection with its customers, by ensuring that their expectations and needs are met. This includes countless analysis, interpretation, and consultations to ensure that customers progress and thrive.
Fourth, Supply Chains maintain strategies that ensure the smooth, continuous, and fast flow of the production process, without sacrificing the quality of the products being produced. By setting a set of procurement objectives and Quality imperatives, customers have an assurance that supplies are continuously flowing within the production stream, therefore enabling a minimized inventory investment without putting quality in line.
Lastly, Supply Chains give huge aid in manufacturing developments. New strategies on how to develop the manufacturing industry are continuously being sought by Supply Chains. This keeps the industry flexible, more customized and tailor-fit for customers. It manages and ensures organization in everything from supplies, up to the packaging of the produce.
Works Cited
Morgan, Jacob. "A Simple Explanation Of 'The Internet Of Things." Forbes. 13 May 2014. Web. 1 June 2016. <http://www.forbes.com/sites/jacobmorgan/2014/05/13/simple-explanation-internet-things-that-anyone-can-understand/#4f89cf986828>.
