Outsourcing services have become one of the biggest trends for several industries around the world. Since almost all industries in the world are in competitive global area, there is more demand for high-quality and more diverse products. This is where the outsourcing of services comes in: There are certain portions of the supply chain that are given to other firms so that the process assures more quality, or even more efficiency, which means that ultimately, the consumers are the winners.
Consequently, this trend of increased demand for outsources services has pushed the development of infrastructure in these countries. Firms have needed more efficient methods of communicating with other firms since, at times, they need to correspond with the service companies in order to clarify specifications or ensure prompt delivery. This need for communication happens because the outsourcing of services does not really happen within the same country. Most firms choose to outsource production from less developed countries where the costs of services are significantly lower. Some examples include H&M which has their clothes made in China and Bangladesh. Thailand is known for creating quality T-shirts, and Ralph Lauren has a working relation with Chinese producer Luen Thai.
It is also evolved into a competitive market for outsourcing providers. Luen Thai has is progressively absorbing the production method in Ralph Lauren’s supply chain, which will make them more money while allowing Ralph Lauren to save money on shipping and production. Moreover, shoe manufacturers in the Philippines, for example, have been losing business to Chinese producers. One report stated that about 60% of shoes production in the Philippines are outsources from China, showing that even developing countries find ways to outsource.
Thus, if you need one indication that will tell that the world is moving closer together, you just need to look at the impact of outsourcing services. For one, this makes things more difficult for the established firms worldwide, since various laws and tariffs, and ultimately, more competition has made company sustenance nearly impossible. However, this also allows wonderful opportunities to business start-ups. The true winners in this trend are the consumers, who will ultimately benefit from high quality, and better-priced goods.