Why should small and medium-sized enterprises do wedding affairs outsourcing? Supply chain management emphasizes focusing the main efforts on the core business of the enterprise, fully playing its advantages, while establishing strategic cooperative relationships with appropriate enterprises around the world. Non-critical businesses are completed by cooperative enterprises, which is called "business outsourcing (outsourcing). Facing fierce market competition, our small and medium-sized enterprises can save limited funds and energy by outsourcing non-critical businesses, focus on key leverage jobs, effectively integrate internal and external resources, reduce operating costs, gain more competitive advantages, and enhance their own competitiveness. Specifically, there are several important reasons for outsourcing business operations: According to reports by the American magazine "Essence", all companies in the world with annual revenues exceeding 50 million US dollars have generally carried out business outsourcing. Dun & Bradstreet's "1998 Global Business Outsourcing Analysis Register" shows that in 1998, the expenditure on business outsourcing by global companies with annual turnover exceeding 50 million US dollars increased by 27%, nearly 235 billion US dollars more than the total expenditure on business outsourcing in 1997. Large enterprises do so, and it is even more necessary for small and medium-sized enterprises because, although small, they have all the essential functions. Although small and medium-sized enterprises are not very large in scale, they desire to do more things and involve more energy during the growth period. So, what factors drive the rapid development of business outsourcing? (1) Control costs and save money. If a certain link in the supply chain is not the best in the world and is not our core competitive advantage, especially if this activity is not easy to merge with customers, then agree to outsource it to the best professional company in the world. They possess more effective and valuable technologies and knowledge for completing business compared to our own enterprise, relying on outsourcing can avoid large investments in equipment, technology, and analytical development. According to authoritative company surveys, the cost savings from outsourcing in various links of the supply chain may be as follows: Cost savings from outsourcing logistics functions Estimated cost savings (%) Road redesign and optimization 10~15 Sealed route dedicated services 15 Transportation mode conversion 10~15 Key transportation management and circuit matching 5~10 Transportation negotiation and auditing 4~5 Inbound transportation cargo consolidation and transportation mode selection 20~25 Reverse logistics 10~15 Specialized carrier local consolidation 10~12 Inventory and inventory cost maintenance 7~10 (Data source: Armstrong and Associates) (2) Share risks. Enterprises agree to rely on outsourcing to aggregate risks caused by government, economic, market, financial and other factors. The resources and capabilities of an enterprise itself are limited, relying on outsourcing, sharing risks with external partners, the enterprise can become more flexible and better adapt to changing external environments. Similarly, Dun & Bradstreet's global outsourcing business survey shows that the possibility of financial trouble for companies implementing outsourcing is only one-third of those without business outsourcing. (3) Auxiliary business functions that are difficult for enterprises to manage or control. Enterprises will outsource business functions that operate infrequently internally, but this method cannot completely solve the problems of the enterprise. These business functions may become even more difficult to control externally. At such times, enterprises must spend time finding the crux of the problem. (4) Use resources that the enterprise does not own. If the enterprise lacks the resources (including required cash, technology, equipment) needed to effectively complete the business and cannot profit from it, the enterprise will also outsource the business. This is one of the reasons for temporary outsourcing, but the enterprise must simultaneously conduct cost/capital analysis to confirm whether this outsourcing is beneficial in the long term, thereby suggesting whether an outsourcing strategy should be adopted. What are the ways of outsourcing for small and medium-sized enterprises? Outsourcing has become an increasingly popular way, like well-known brands such as Nike, IBM, HP, Compaq, etc., which have grown into international famous brands through outsourcing processing. So, what are the main ways of outsourcing? (1) Temporary services and short-term workers. Enterprises use the least number of hired workers to most effectively complete the prescribed daily workload, and hire short-term workers when auxiliary services are needed. Due to temporary workers' fear of unemployment or emphasis on wages, they take their work seriously, thus improving work efficiency. The advantage of temporary services lies in the fact that the enterprise desires employees with special skills but does not need to permanently employ them. (2) Cooperate with competitors. Cooperation with competitors is also a form of outsourcing. Cooperation with competitors allows both parties to input their resources into common tasks (such as joint development), allowing the enterprise to aggregate the risk of developing new products, while enabling the enterprise to obtain higher creativity and flexibility than individual enterprises. Similarly, the cooperation between Altera Corporation and Intel Corporation is a good example. Altera Corporation is a leading enterprise in high-density CMOS logic devices. At that time, it had a new product idea, but lacked the silicon wafer production capability within the company, while its competitor Intel Corporation could produce it. Therefore, they reached an agreement: Intel Corporation would produce this silicon steel sheet for Altera Corporation, and Altera Corporation would authorize Intel Corporation to produce and sell Altera's new product. In this way, both parties obtained competitive advantages that they could not achieve alone through cooperation—Altera obtained Intel's production capacity, and Intel obtained the related benefits of Altera's new product. (3) Brain outsourcing. It is reported that currently "brain outsourcing" is mostly information technology management, accounting for 28% of all business outsourcing services. Apparently, every company engaged in business outsourcing outsources some functions of its information department. (4) Public relations outsourcing. Internationally, public relations outsourcing has become a fairly popular practice. Indeed, most of the Fortune 500 companies outsource part or even all of their public relations activities. Some forms of public relations outsourcing are quite unique, such as DuPont and GM outsourcing some of their public relations functions to professional PR firms. Some employees working in these companies are actually employees of the PR firm, receiving salaries from their own company, and all activity expenses are included in the headquarters’ settlement. The PR firm and these employees jointly plan PR activities, which are specifically implemented by these employees. (5) Online outsourcing. A recent survey by an American market research company of 150 large enterprises revealed a significant difference in the first-year costs of setting up a high-end website between self-building and outsourcing. Virtual hosting Software Writing fees Venue fees Labor costs Total (Note: partial million US dollars) Self-built 0 2.7 3.1 3.0 16 22.1 Outsourced 4.2 0 0 0 0 4.2 (6) Human resource management outsourcing. Currently, some outstanding intermediary agencies in the country offer "online talent management" and "talent specialists," which are prototypes of human resource outsourcing. They can handle everything from talent sourcing, relationship transfers to individual file management, completing the entire recruitment process for enterprises. What are the issues and countermeasures in the current outsourcing process? (1) One issue comes from the employees themselves. With more business being outsourced, they worry about losing their jobs. If they know their jobs are temporarily outsourced, it might lead to an increase in employee ethics and performance because they lose confidence in the company and motivation to work hard, resulting in lower performance levels and productivity. Some companies may aim to obtain lower labor costs. More and more companies are shifting parts of their operations to less developed countries to obtain cheaper labor and reduce costs. Companies must ensure that their standards in these areas are not too far off from the local ones and must ensure that the company's recruitment activities have a positive impact locally. Public perception has a significant impact on the company's business, costs, and sales. (2) Outsourcing generally reduces the company's monitoring of operations but may also increase the likelihood of transferring responsibilities. Because companies must continuously monitor the behavior of external companies and establish stable long-term relationships with them. Global business outsourcing also has its simplicity, risks, and challenges. International transportation may encounter regional restrictions, orders and reorders may face quota restrictions, exchange rate fluctuations and currency differences may affect payment operations. Therefore, global business outsourcing requires personnel with specialized international trade knowledge, including international logistics, foreign exchange, international trade practices, and assessment of foreign suppliers. (3) Information technology has not kept pace with the development of the times, and information lag remains a critical factor affecting the outsourcing of corporate operations. Therefore, companies must build their own information systems and accelerate the modernization of information work, especially making full use of the Internet to integrate their business management into the global information network. In this way, it creates an environment for business outsourcing.