Explore the potential problems and issues that an organization would Essay

Explore the potential problems and issues that an organization would need to consider when re-sourcing requirements back to thei - Essay Example In recent years however, the benefits of outsourcing have decreased due to increasing costs of production in Asia, long-lead times, poor communication with Asian countries, large quantities for minimum orders, as well as poor quality of products (Green, 2013). Due to these issues, outsourcing countries have made attempts to re-source their production back to their home countries. Undoubtedly, major challenges are foreseen in on-shoring or re-sourcing, not the least of which involves loss of profits, which to any business is always problematic (Green, 2013). Still, businesses have gradually initiated efforts to re-source their production to their home countries mostly because they believe it would be the better option for them in the long run. This paper shall now explore the potential problems and issues than an organization would need to consider when re-sourcing requirements back to their home country and how these potential problems might be addressed or mitigated by the procureme nt function. Body There are different problems which have and will likely emerge for businesses seeking to re-source or in-source their production processes. ... This would imply the importance of some elements of IT skill in the related area, alongside an effective population having the right attitude to flourish in careers related to IT (Williams, 2012). The location need not be in the cities or metropolitan areas, but an area which is still big enough to support the logistics of its production processes. The chosen area must also be low-cost (Qu, et.al., 2010). In general, areas which are the most efficient sources of modern technology have become very expensive areas to reside in; as such, wages for these areas are also expectantly higher than other areas. Under these conditions, it would be difficult for the businesses seeking to establish new re-sourcing areas to achieve profitability without having to sacrifice either the availability of the best technology or the lower wages of the employees (Hirscheim, 2000). The importance of securing an educational system which is responsive to the needs of the industry is also a challenge for thes e businesses. A significant decrease in IT graduates has been observed in the past decade and some areas have even eliminated IT education from their curriculum. The challenge for these corporations would be to revive the enthusiasm of the young population in order to be more responsive to the needs of these businesses and to work out technology issues (Williams, 2012). General Motors has recently considered relevant moves in order to secure insourcing of elements of its production process, mostly bringing back work to Austin, Texas (Thibodeau, 2012). Its insourcing move was however very much challenged with the limited relevant skills needed from its new employees