November 14, 2010
Stevie W. Weaver
Professor Roy Chuang
Today I will discuss options that would be good for Futronic, Inc. in reducing cost for the business. We will look at outside sourcing for some of the in-house services. We will discuss keeping the business in house and look to outsource some of the units. The benefits of outsourcing will not only save our business money, it can help us grow and hire more local employees with the money we save. What are the main reasons people outsource? * Lower worker costs
* Ability to concentrate on core functions
* More specialized workers to provider better customer service * No overhead, everything our employee uses is included in the price * No taxes, all taxes and fee’s are included in the price * No Health Insurance coverage
* No IT or Computer support required they are included
* No Phone or LD costs as they are also included
* No power or space required!
* Have more people for less money
It’s time to leverage our time by saving it!
The table below will give us some relevant facts for and against outsourcing. FUTRONICS CENTRAL STORE| COMPARISON ISSUE| OUTSOURCING|
Serve forty-two area sites| Warehouse| Distribution Warehouse| 500 items| Number of Items Stocked| 600 items + This would give us a greater chance to grow| To the building dock or reception area| Delivery| Secretaries’ desk| Cost of maintaining product in-house we have. Building, electric, water, etc.| Cost| Cheaper cost because we would not have to worry about the purchasing and maintaining storage of product.| Lengthened order times| Service Complaints| Under specific guideline on order processing|
With this information there are areas that we could cut back on and save the company both expenditures and overhead cost. Of course we would like to keep the staff that we have now and maybe try to move...