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How can outsourcing affect the quality of products and services provided by companies that outsource?

Sofia Vile

Outsourcing can affect the quality of products and services provided by companies in different ways. On one hand, outsourcing may result in quality improvement due to the fact that when a company outsources certain processes or functions, it oftentimes hires specialized firms or individuals who have the expertise and resources needed to perform the task exceptionally well. The outsourced party can bring in added value in terms of experience, efficiency, and innovation. They can leverage their knowledge to introduce new perspectives and best practices that the outsourcing company may not have considered before. A specialized provider can also have a wider network of suppliers, which can allow the outsourcing company to access a diverse range of inputs, thereby improving product quality and customer satisfaction.

On the other hand, outsourcing can decrease quality when companies overlook critical factors in their outsourcing decisions. For instance, outsourcing companies may select a provider based on cost reduction reasons alone, disregarding other factors that could negatively affect the quality of the products or services delivered. These factors can include communication barriers, lack of proper quality controls, or a lack of a common goal between the parties involved. Companies may also overlook the hidden costs of outsourcing, including legal fees, research, market adaptation, or loss of confidentiality, among others.

One of the most common quality problems when outsourcing is that the outsourcing company takes a hands-off approach, assuming that the provider will manage everything. This can result in the provider doing things in a way that does not align with the outsourcing company's vision or customers' values and expectations. This lack of oversight can result in decreased quality, which may become evident when customers start to complain or return their products due to a lack of satisfaction.

Another issue that outsourcing can cause is the lack of control over the product or service specifications. When a company outsources, it may not have the same degree of control over the production process that it would have had in-house. As a result, the outsourcing company may be unaware of quality issues that arise during production. Thus, it’s important to set expectations and quality standards with your outsourcing partner to avoid future problems.

In conclusion, outsourcing can both promote and undermine the quality of products and services provided by companies. However, to ensure quality improvement, outsourcing companies need to choose their partners with care, define their expectations, maintain thorough oversight and collaboration, communicate effectively, and keep improving the products or services that they offer. If these best practices are followed, outsourcing can be a useful tool to achieve improved quality.