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An Operations Management Case Study
Although outsourcing becomes one of the options for original equipment manufacturers (OEMs) to reduce costs and increase returns, it has advantages and disadvantages. The following is a discussion on the IBM's decision on outsourcing computer assembly to some electronic manufacturing services (EMSs). It discusses the advantages and disadvantages of the decision, and recommends some operations strategies to both IBM and EMSs.
ADVANTAGES AND DISADVANTAGES.
The main advantages from outsourcing IBM's computer assembly are focusing on core competencies, reducing costs, and accessing world-class capabilities. However, IBM's decision is associated with the disadvantages of losing control and knowledge, and instability.
Advantage I: Focusing on Core Competencies
Focusing on core competencies is the most strategic objective that an OEM seeks from outsourcing. …
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