Discuss the advantages and disadvantages possibly experience

Discuss the advantages and disadvantages possibly experienced by the American computer manufacturers, such as HP, when outsourcing manufacturing and assembly to countries in Asia. Your discussion should address the following aspects: cost, focus on core activities, risks, employee morale, and product quality. Consider whether other types of manufacturing companies could experience similar advantages or disadvantages in outsourcing.

Solution

The advantages of manufacturing and assembling of computers in Asia are

1. The costs of production reduces as the wages of the producing countries are low

2. Comanpny now needs to plan for the topline as bottom line is already managed

3. Generate employement in third world countries in Asia.

4. Reduces the product lifecycle and the products are released with greater speed and volume

5. Helps company to shift their focus to R&D rather than production

6. Consistent quality is guaranteed with minimal cost

Disadvantages

1. Company dont have direct control on the costs though it may be cheaper than manufacturing at home. It is possible that contract manufacturer is inflating the costs of spareparts

2. Company have no control on suppliers and the quality of material they supply

3. Affects the morale of the employees at home as they start believing their jobs are at risk

4. Contract manufacturer gains expertise in it and may also help the competitor with it thus reducing advantage

The above advantages and disadvantages are same for any manufacturing company.