Outsourcing

Outsourcing is a method utilized by different companies to subcontract the manufacture of the components of their products to outsides firms. Rather than producing the components themselves, they discover it more convenient and less costly to have other produces the components.

In most of cases, the big firms continue to do the final assembly of the product at their own plants where they might maintain better control over product quality. The benefits of outsourcing includes decrease labour, removal of equipment that is poorly used, avoidance of major investments in new manufacturing facilities, decrease in inventory, and dealing with companies that are expert at certain manufacturing technologies.