Facility Planning

Outsourcing can be defined as turning over all or part of an organizational activity to an outside vendor. Outsourcing is often seen as a tool of cost cutting where companies move their jobs to an outside vendor on an ongoing basis. These services were initially provided internally by that organization. The pressure of the current market forces and the price wars have forced many companies to reduce cost by outsourcing its non-core activities to low wage countries in Asia. A cost cut of any manner can change the company's position in the market. Companies with low cost leadership are able to gain the potential market share.
Many companies around the world are adopting the practice of outsourcing their activities to the Far East developed and developing countries. Outsourcing of manufacturing operations started back when many companies started to invest in China and now have their manufacturing operations there. However, the current trend of outsourcing focuses on outsourcing company’s non manufacturing activities. This paper discusses the relationship between the U.S. and India involving outsourcing of products, jobs and services. It points to some reasons for India being the winner in attracting companies across the globe to outsource their non-manufacturing activities. Finally, some of the advantages and disadvantages are discussed.
INTRODUCTION

Thus in the current global economy, it is important for companies to find ways to accomplish more with less resources. Globalization is the search for markets to sell products and services at the higher prices and to procure products and services at the lowest prices. One of the ways for a company to do this is through outsourcing.
The first sign of outsourcing was witnessed by the manufacturing industry, and China emerged as the winner in terms of attracting jobs and foreign investment. At this stage of outsourcing, it was common for a company to have its manufacturing plant in the Far East or