Logistics is often an area that can be outsourced.
When considering outsourcing, many organizations start with the same question: Which activities should we outsource, and which tasks should we do in-house?
For instance, imagine that you work in the healthcare industry. Should you outsource your cleaning staff, or hire in-house cleaners?
Would the decision be the same for an IT company?
If you worked for an airline, would you outsource your catering, or hire cooks directly?
What if you managed a luxury hotel?
These are complicated questions, and the answers can have huge effects on your organization's short-term and long-term success.
Making the right decision can add significantly to your organization's bottom line in terms of cost savings and increased efficiency. Outsourcing can bring fresh minds to your business, and it can also free time up for innovation and other vital tasks. However, making the wrong decision can put your business at a competitive disadvantage. Perhaps you'll lose control of proprietary information, or receive components that don't meet your organization's quality standards.
So, how can you ensure that your organization makes the right decision?
The Outsourcing Decision Matrix helps you see clearly which tasks, processes, or functions you should keep in-house – and which can be safely outsourced. In this article, we'll examine the Outsourcing Decision Matrix and see how your organization can use it to make better outsourcing decisions.
The Outsourcing Decision Matrix, shown in Figure1, helps you consider two important factors in outsourcing a task:
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