- What are the benefits of supply chain outsourcing?
- What are the factors that help e-commerce organizations through supply chain outsourcing?
- What is the impact of the supply chain outsourcing on international development of e-commerce Company?
Background of the research
Rai et al. (2012) stated that the main reason for incorporating outsourcing are to reduce and control the operation cost, improving the company’s focus areas, gaining accessibility to global capabilities, free up the internal resources for major business aims and maximizing the utilization of external resources. Lacity and Willcocks (2013) also stated that especially for the organizations that desire to expand their business operation in multiple locations, opting third party providers for the delivery of the products to the target customers is the most beneficial solution. Christopher (2016) furthermore portrays that outsourcing was initially used when organizations are facing problems in maintaining the world-class standards. This lack of maintaining the standard can be occurred due to incompetent staffs, lack of resource capacity and technological and financial pressures Ross (2016). However, in recent times, outsourcing is opted for perfect work from the experienced clients. Taken for instance, a retail company hiring a third party organization for the maintaining the supply chain process and these organizations are only offer logistics services. In such cases, not only the former company is able to focus on their core competencies but also allow the third party to perform the work in which they are expertise. Some of the most common business aspects that can be outsourced are network management, risk management, security services, IT management, software maintenance and others (Massini and Miozzo 2012).
Image 1: Business functionalities that can be outsourced
(Source: Massini and Miozzo 2012)
The company that will be considered for this research study is Amazon, which is an electronic commercial organization and serves with delivering their products in multiple locations all over the world. In UK, Amazon’s carriers are “An Post”, “Aramex”, “Arrow XL”, “CitySprint” and others; while in recent times, the company has targeted to give the carrier operation to “Australia Post” (Amazon 2018). This research will find the benefit that Amazon has attained by allowing third party providers to handle their supply chain operation.
- H0: There is a positive impact of the supply chain outsourcing on international development of e-commerce Company
- H1: There is no impact of the supply chain outsourcing on international development of e-commerce Company
This research aims for finding the impact of the supply chain outsourcing on the international development of e-commerce companies by highlighting the benefits of the supply chain outsourcing and factors that help that help e-commerce organizations to prospect with the same approach. This research will also demonstrate the existing supply chain outsourcing approaches that help Amazon to reach international locations.
Overview of outsourcing
Gibb, Zeng and McKeown (2012) highlighted that outsourcing is a process in which a company hires other organization of a person to accomplish their tasks. In this case, the later organization is known as third party provider or service providers that utilize their own workers and external and internal resources to complete the work taken for an organization. Willcocks and Lacity (2016) stated that the outsourcing business functions are also known as business process outsourcing or contracting out.
Advantageous factors of outsourcing
Concentrating on the core functions- Lacity and Willcocks (2013) stated that by outsourcing some of the business operations to other company, it is easier for a business to focus on their core competencies and allocate the resources for improving their main functionalities.
Shared risk and lesser drawback in outcome- Massini and Miozzo (2012) depicted that as a third party provider is expertise in their functions, hiring a company or an individual diminish the risk and a third party provider are well aware of the risk associated with their functions and hence take suitable approaches to overcome the risk and thus the occurrence of risk can be diminished. In such case, the main company needs not to focus on this risk management system and hence there is risk is shared.
No investment for recruiting new team- Developing a new team for handling the business process that a third party can also do, needs more financial investment for hiring and recruitment. In this aspect, a company need to conduct a hiring program and then evaluate the competency of the candidates whether or not they are able to perform that business operation effectively (Gurung and Prater 2017). Thus, outsourcing eludes the need of cost involvement for hiring individuals.
Advantages of e-commerce organization through the application of supply chain outsourcing
Focuses more on the maintaining diversified products- E-commerce are best known for the availability of different products of all age group and price range. Their main function of an e-commerce site is to keep these products stored in the inventories. Thus, if an e-commerce site offer their logistics services to a third party, the e-commerce company can focus more on the diversification of the products and collaboration of more sellers and companies to showcase their products through their e-commerce website.
Reach to global places- Schniederjans, Schniederjans and Schniederjans (2015) portrays that the main function of the logistic services is to deliver the products from one place to the other. Thus, hiring third party from different area, where the company is offering their services allows the main company to reach to significant number of customers. The main advantage in this case is that the company gets access to perform their business functions in different areas which help them to make their brand international.
Develop effective partnership in different locations- Soodyall and Singh (2013) highlight that in order to perform business in a nation, a company needs to adhere all the business regulations and maintain political demands. However, Schniederjans, Schniederjans and Schniederjans (2015) stated that it is better to hire a third party from each nation as they are well aware of these regulations and legislations of business and can perform the business operations by satisfying all the needs. In such cases, the e-commerce do not have to adopt any different approaches but get the opportunity to develop partnership with different companies of different nations which will furthermore helps the former company to establish an efficient brand reputation.
Make the delivery process easier- Christopher (2016) stated that in an e-commerce company, it is important for delivering the products in lesser time possible. However, if outsourcing is not adopted by an organization, political problems and customs regulation in other nations might be the reason for delay in delivery process. Gibb, Zeng and McKeown (2012) furthermore depict that this delay results in more customer dissatisfaction and poor brand images. Whereas, a third party provider can avoid these problems as they know the procedure to do business in such situations.
Quantitative and qualitative research design will be followed in this research study. Neuman (2013) stated that when numerical data are considered for assessing the research outcome, the process is known as quantitative research design. These data can be from primary or secondary sources. On the other hand, when data are analyzed theoretically and there are no numerical data are present, the research design is known as qualitative (Maxwell 2012). This research study will focus on the primary data collection and the data obtained is analyzed quantitatively.
The project type considered in this research will be explanatory as developed theories and models will be used to answer the research question. Bryman and Bell (2015) depicted that exploratory project type is used when new direction is desired to obtain based on the research topic.
Smith (2015) stated that there are two types of data collection technique- primary and secondary data collection. Thus, the data will be collected through survey and interviews. Some of the staffs in the supply chain department will be considered in this research study; while managers of the same department will be considered for the interview. However, in order to develop theoretical framework and literature review, existing data like research articles, peer journals and websites data will be considered in order to get the overview of the factors that help e-commerce organizations through supply chain outsourcing and identifying the impact of the supply chain outsourcing on international development of e-commerce Company. The employees are selected so that the factors that help e-commerce organizations through supply chain outsourcing will be assessed. Moreover, the managers of the company will be selected for discussing the advantage of the supply chain outsourcing in the company can be identified.
Data collection techniques
Bryman and Bell (2015) depict that data for a research is collected through two different ways- primary and secondary data collection techniques. Marshall and Rossman (2014) also portrays that when data for the research study is collected trough survey, interview and questionnaire, where direct participation of the research respondents is required, the process is known as primary data collection process. However, on the other hand, when newspapers excerpts, research papers, research articles and peer review journals are considered for collecting already published data, the process is known as secondary data collection process.
In this research study, the data will be collected through primary data collection process. The organization that is concerned in their research study is Amazon and thus all the participants selected will be from this company. Some of the employee from supply chain department will be considered for the survey and the managers from the same organization will be considered for the interview session.
Justification for the chosen data collection technique
The research will highlight a study based on a particular company. This research aims for highlighting the major benefits of the supply chain outsourcing and the advantages that the concerned company has obtained through the implementation of the supply chain outsourcing. Thus, in order to get the accurate data based on the research topic, primary data will be appropriate. Moreover, if the secondary data will be considered, the data obtained are not updated which will not represent accurate research outcome. Moreover, the data based on the profitably earned by the company is better discussed by the managers of the companies. Thus, the primary data collection will be suitable for this research study.
Key themes of the survey questions
The research aims for finding the benefits of supply chain outsourcing and the factors involved that help e-commerce organizations through supply chain outsourcing. Thus, the questions asked from the research respondents that are the employee of the supply chain department will be asked questions based on the research variables. In this research there are two research variables- independent variable and dependent research variable. “Supply chain outsourcing” is the independent research variable and “international development” is the dependent research variable. The research question for the survey comprised of many questions starting from demographic questions. The survey also continued with question based on supply chain outsourcing international development so that factors for both the research variable can be obtained.
Key themes of the interview questions
The questions that will be asked in the interview is based on the importance of the supply chain outsourcing, benefits that Amazon has attained through the outsourcing the logistic section in the supply chain management process, current or existing strategies for developing effective partnership with third party providers and future plan for the improvement in the supply chain outsourcing process. These interview questions will allow cross checking the research outcomes and addressing the research questions.
Research Analysis technique
Lampard and Pole (2015) stated that data are analyzed quantitatively and qualitatively. As mentioned above both the process of quantitative and qualitative analysis technique will be utilized in this research study. The numerical data from the survey will be collected in the likert scale format; while the data from the interview questions will be noted down in the laptop when the manager is sharing the answers. The likert scale will also have five options for each quantitative question that are “Strongly Agree”, “Agree”, “Neutral”, “Disagree” and “Strongly Disagree”. The data obtained from the survey will be analyzed through regression analysis. On the other hand, the interview answer will be analyzed theoretically.
Justification for the chose research analysis technique
Draper and Smith (2014) stated that regression analysis is used to prove the relationship between the research variables. Moreover this analysis is used for testing the hypothesis formulated in the research. Thus, in order to establish a relationship between the two research variables that is “supply chain outsourcing” and “international development”, regression analysis will be appropriate. Moreover if the value of the regression analysis comes below the 0.05, the null hypothesis will also be rejected which will help in defining the research study whether or not the supply chain outsourcing will impact positively or negatively on the international development of the company. Thus, it can be stated that the regression analysis will be appropriate for analyzing the data collected from the survey.
The data obtained from the interview will be analyzed theoretically. The analysis will be chosen as comparative analysis. Through the comparative analysis the outcome from the research analysis of the interview questions will be cross checked by the research outcome from the survey data analysis. Furthermore, the common aspects will be considered as final research outcome. Thus, comparative analysis will be suitable for analyzing the interview question.
While conducting an effective research proposal and gathering appropriate data and information from various resources the researcher will have to follow ethics, values and beliefs. Psychological ethics imply that the participants would not be imposed decision for providing their information beyond going their willingness. The spontaneous response of the participants will be highly appreciated for analysis data about the research issue. Moreover, the researcher should not take any kind of physical action for involving the respondents in collecting necessary data and information. As per skill and competency every single participant belonging to various cultural and social backgrounds should get equal priority and response in data collection. The researcher should never discriminate any respondent as per their religious backgrounds and cultural attributes. In case of any kind of linguistic barrier researcher would have to follow two major initiatives. Firstly, the researcher can adopt multi-lingual flexibility based on which the method of communication process would be easier between the speaker and listener. Secondly, the researcher can follow non-verbal communication method as well. If the participants are not flexible in verbal communication the researcher can allow the participants in maintaining written communication as well.
As per the value and belief of research project, the researcher should not take any kind of financial burden while conducting the entire work. They can easily make the entire project as per their level of financial efficacy. Legal factor implies as one of the most significant ethical considerations while evaluating the project. Data protection should be strictly maintained interacting with the respondents. This specific act ensures that the researcher should never leak collected data in front of the third party without taking permission of the concerned person. In addition, gender equality act, anti-discrimination acts leave major significance in maintaining ethical considerations. The researcher while gathering data will not show any kind of gender biasness.
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