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Futronic Case Study Paper

Assignment: Case Study November 14, 2010 Stevie W. Weaver (d03490478) Student DeVry University 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 them around in other areas of the business. But even still we should be able to save money for the business. With outsourcing, we would get specific employees of popular positions which include: * Call Center Agent * Accounting * Receptionist * Web Designer * Web Developer Technical Support Representative * Customer Service / Sales * Data Entry * Fully Skilled Worker With these assists, Futronics would be able to create positions within the business that could help the business grow. Positions such as product research, this would allow some of our employees to have a new position and give us the opportunity to bring in more products to the business. As we would like to grow our business there is areas of improvement in many different ways. Some of the improvement could come by way of outsourcing. IDEA| BENEFIT| FEASIBILITY|

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Change staff ratio from four full-time to two full-time and two hired for seasonal work| Reduce annual labor costs| Possibly. However the tradeoff would be slower delivery time and backlog of work on heavier “off peak” weeks. | Increase the information system department| Increase faster turn around time for product delivery | Possibly. This would cause a increase of cost of employee specialty | Sign a three year contract with options to renew| Save money and increase profit| Possibly. This would give Futronics a chance to see the benefits of outsourcing |

If we decide to outsource, the most important step is to plan your outsourcing strategy. There are some horror stories of outsourcing going wrong and this was definitely caused due to poor planning and hurried execution. For our outsourcing project to be successful, the most important step is identifying a suitable partner who is flexible to match your exact needs and go with the right outsourcing strategy. The companies that went with clear outsourcing strategies have enjoyed massive benefits, out thought their competition and are operating at an enviable position. Damani, 2010) Futronics is looking for ways to save money and grow the business. There seems to be things that come up that we are not 100% of but there are things we could do to increase product, revenue, and increase the gains of the business. As I research the possibilities, I have come to the conclusion that Futronics should look at the possibilities of outsourcing some of the areas in the business. Futronics should maintain control of the marketing and sales of our products.

We should also maintain control of our financial areas in the company. We should look at the idea of outsourcing the warehousing of product, and delivery of sales. With these possibilities, I think that our business can and will gain more respect with the competition and be able to take the business to higher heights that we have never been before. This will give us a great opportunity to grow our business and have a great satisfied customer base.

Reference

http://www. rightwayoutsourcing. com/ Copyright © 2009 | Right Way Outsourcing LLC

http://EzineArticles. com/? expert=Viraj_Damani © 2010 EzineArticles. com – All Rights Reserved Worldwide. Accounting Outsourcing Can Help Your Business Save ‘Time’ And ‘Money’ By Viraj Damani

http://EzineArticles. com/? expert=Christopher_S_Ray © 2010 EzineArticles. com – All Rights Reserved Worldwide. Can Hiring an Outsourcing Company Save Your Business Money? By Christopher S Ray Viraj Damani Level: Basic Viraj Damani is a Process Manager at ITCube Solutions with over 7 years experience in the ITES/BPO Industry.

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