myz-vgb.ru A Business Encyclopedia

Outsourcing Inventory System

Definition: The Outsourcing Inventory System is adopted by the firms to reduce the burden of manufacturing the components of the finished goods in-house i.e. within the organization. Thus, a system of buying the products or components from outside vendors rather than manufacturing internally is called as Outsourcing Inventory system.

Many companies develop a single source of supply from where the needs of the material can be fulfilled. While many others help in developing the small and medium sized ancillary units to supply the adequate quality components, as required for the manufacturing of the finished goods.

Tata Motors is the prominent example that uses the outsourcing inventory system. It has developed several ancillary units around its manufacturing plants to get the parts and components in time. This has benefited the ancillary units as well, with the help of Tata Motors they are able to manufacture the best quality components.
Likewise, Tata Motors, Maruti, an automobile company, uses this inventory system to fulfil its need for the components.

Thus, with the help of an outsourcing inventory system, a manufacturing firm can reduce both the time and money involved in manufacturing the components in-house. Also, it enables an organization to capitalize the manufacturing efficiency of others, which could not have been possible, if manufactured internally.

Leave a Reply

Your email address will not be published. Required fields are marked *

Shares

Related pages


7cs communicationdefine liquidity ratioslr in banking termsdebenture defineexamples of a laissez-faire leaderparticipative leadership examplesdividend growth model assumptionspiece rate compensation definitionkiosk banking sbiasset meaning in marathicost push inflation causesdefine retained earningsurveyed synonymmonoplistic competitionsingle seller monopolyclassical theoriststrategic intent in strategic managementmarketer definitionmsf rateelasticity of demand diagrammajorly meaninghygiene factor meaningwhat is demand estimation in managerial economicsdefine pricing strategiesethnocentric business definitiontruncate meansproportionality assumptionholistic marketing concept definitiondefinition of penetration pricingdiversification meaning in hindiindifference curve in hindiobjectives of bprquening theorylaissez faire leadership characteristicspsychoanalytic meaningadvantages and disadvantages of human resource planningwhat is assets turnoverlaissez faire management definitiontypes of informal communication in organizationsquota sampling methodexamples of unitary elastic demandtheory x and theory y managersstraddling definevestibule defpiecework systemdefinition of neoclassicalcobb douglas functioncompany pf contributionmeaning of attitude scaleadvantages and disadvantages of short term financingdifference between brand equity and brand imagemeaning of liability in hinditreasury securities indiajob rotation trainingwhat is participative decision makingjoseph schumpeter innovation theorytaylorism scientific management definitioncosting meaning definitionobjectives of quality circlefactors affecting the promotional mixhr balanced scorecard definitionmicro market and macro environmentfeachers meaningvestibule training exampledeontology ethics theorypavlovs theorywhat is oligopoly competitionrecruitment methods in hrminternal equity in compensation systemasset utilization ratio formulaporters model