Foreign Outsourcing Manufacture Activities -Myassignmenthelp.Com

Question: Discuss About The Foreign Outsourcing Manufacture Activities? Answer: Introduction The new organisational chart of YOLO above shows the Australian and the overseas operations. The chart shows that the main decision making power would be reserved by the apex management of YOLO based in Brunswick. The important departments namely, the human resource department, marketing department and the finance department would be retained in Australia. The overseas division would be based on Philippines and would contain the production department outsourced to local Philippines textile firms (Deresky 2017). The outsourced manufacturing facility would again be divided into two divisions. One division would manufacture clothes for the Australian market while the other division would manufacture clothes for the international markets. Justification for operations of the above organisational structure: It can be justified that YOLO opted to outsource its manufacturing process to reduce cost of production. This reduction in cost of production would help the firm to its apparel to huge bases of customers both in Australia and abroad at lower prices, thus enhancing its revenue generation from these markets (Haas et al. 2015). The case study strongly mentions that T-shirts by YOLO are available widely in Australia and that the company is shifting towards foreign expansion. Thus, it can be assumed that YOLO has no foreign branches and its operations are restricted in Australia. It must operations be pointed out that the main raw material for manufacturing T-shirt is cotton. One can also point out that the main cotton producing countries are in Asia. This means that by outsourcing the manufacturing facilities in Philippines which is in Asia, the firm can obtain high quality Asian cotton at economic rates (Haule, Carr and Rigout 2016). The Asian countries like China and India are not only cotton producers but also have large consumer bases for cotton apparel. Thus, the firm would be able to get access to the resources and consumer bases in these markets from Philippines. Thus, the firm by outsourcing its manufacturing facilities to Philippines would be get access to the Asian cotton raw material market and co tton apparel market in Asia (Baumers et al. 2016). This would allow the firm to obtain raw materials at low cost and maintain low cost of production. This means that the company can sell T-shirts at low prices both in Asian markets and Australian market, thus generating immense revenue. The second factor fuelling YOLOs manufacturing outsourcing to Philippines is that the geographical position of the latter is closer compared to the other leading Asian markets like China. This means that firm would be able to transport finished goods from its outsourced manufacturing facilities in Philippines to its Australian markets at low logistics charges. The company as a result would be able to maintain low cost of marketing the products in the Australian market. Moreover, this would also enable closer overseeing of the manufacturing facilities in Philippines and simultaneously gain advantage from the Asian markets (Giljum, Bruckner and Martinez 2015). This analysis proves that the outsourcing of manufacturing facilities to Philippines would prove to be profitable for YOLO. Reference: Baumers, M., Dickens, P., Tuck, C. and Hague, R., 2016. The cost of additive manufacturing: machine productivity, economies of scale and technology-push.Technological forecasting and social change,102, pp.193-201. Deresky, H., 2017.International management: Managing across borders and cultures. Pearson Education India. Giljum, S., Bruckner, M. and Martinez, A., 2015. Material Footprint Assessment in a Global Input?Output Framework.Journal of Industrial Ecology,19(5), pp.792-804. Haas, W., Krausmann, F., Wiedenhofer, D. and Heinz, M., 2015. How circular is the global economy?: An assessment of material flows, waste production, and recycling in the European Union and the world in 2005.Journal of Industrial Ecology,19(5), pp.765-777. Haule, L.V., Carr, C.M. and Rigout, M., 2016. Preparation and physical properties of regenerated cellulose fibres from cotton waste garments.Journal of cleaner production,112, pp.4445-4451.