Outsourcing

Sophie Paridon

Blog 3C

Outsourcing Benefits and Causes

The food and beverage industry is relevant across the world, and there are several companies and restaurants that are relevant In the United States as well as overseas, such as Hershey’s and McDonald’s. This means that almost all players in this industry can be manufactured overseas, including employees, research and development, and the suppliers. For example, Shellz Overseas Private Limited Company exports both food additives (a link in the supply chain) and confectionaries (an end product) to the United States. Outsourcing is very common because it allows manufacturers to expand and “fill niche product lines and execute many functions more efficiently -- from production to product development, R&D to maintenance” (Fusaro). Many companies outsource in order to be more efficient, save money, and access more technology and equipment.

There has been a trend in India for a growing appreciation for Western fast foods. Due to this trend, Dunkin Donuts and Starbucks are starting to open up locations in India this summer. The “growing adoption of international tastes is pushing coffee consumption in India to rise 6% to 7% a year” (Ahmed). The food and beverage industry in the United States has realized this drift, and are therefore starting to manufacture more goods overseas, as well as opening up new chain locations.

However, several companies are against outsourcing because they want to be able to maintain control of their product and overlook the production of their goods. They want to control all elements of their products in order to assure quality. Companies that are against outsourcing also claim that outsourcing can lead to higher costs, lower quality goods, and late deliveries.

Despite the different views of outsourcing within the food and beverage industry, it is clear that this trend will continue for some companies, because they favor the benefits of more sources and lower costs. In addition, chains and companies will continue to open and sell across the world, thus creating a sense of unification across the globe.