Outsourcing is whereby a company decides to purchase services or even products from outside suppliers instead of carrying out the same task within the company. The main reason why most companies outsource is to cut down on costs.
The decision to outsource is critical since it involve weighing between saving cost against losing control over the company’s services and products. However, research shows that it is always worth the risk especially if you outsource your company to an expert. This is because the company is likely to save more on cost and also gain profit due to excellent services which attracts customers.
Food services are one of the most common outsourced functions in the business community. This is because there are unique aspects of food service operations that usually add advantage to the industry when they outsource their services. The following illustrates why food services are the most commonly outsourced function in business community and the advantages gained through outsourcing food services to a manager contractor.
One of the reasons why food services are the most commonly outsourced function in business community is because they deal with direct production and distribution of goods. A lot of money is needed to offer good food services especially when it comes to labor costs and overhead costs.
This is why food service industry has turned to outsourcing services. Through outsourcing, they are able to generate products with minimal amount of capital; the company will be able to save on labor and overhead costs. Outsourcing is a tool that food services use to keep competitive advantage in the market.
They are able to efficiently meet subsidiary needs through outsourcing. However, despite outsourcing not being a cure to all the problems faced by food industry, it helps the manufacturers save money and also speed up production. Outsourcing enables food service providers to build viable services and also be able to predict variable costs and fixed costs.
Some of the advantages of outsourcing food services to manager contractor are to gain flexibility. Outsourcing the company to a manager contractor who produces food services under the brand of another company will enable the company to produce more services.
This is because the contract manager has more capability to produce goods and services to the company. This is likely to increase production but at less cost making the company more profitable. Another advantage of hiring manager contractor is reduction in staffing needs and requirement.
Fewer labourers will be required to offer services. This means that there will be a reduction in spending. Temporary workers are always paid lower wages as compared to permanent workers who normally require allowances such as health benefit which increase cost. Outsourcing will enable the company to focus more on its resources, finances and human areas which increase profits and also revenue.
Outsourcing also reduces costs for manufacturing since increasing revenue while focusing on marketing and sales increase profit. Outsourcing help reduce management and continuity risks. This is because having a manager contractor brings substandard operation level to the company.
The company will continue to operate all the time because the manager will always be available to supervise progress of work in the company. Outsourcing also led to reduced overhead. Whenever a business grows, it normally requires more workers and managers; however, outsourcing will limit overhead demand. There will be no need to expand the restaurant to accommodate more staff members because one professional manager is enough to manage the big company.