Question

What value creation activities should a company outsource to independent suppliers? What are the risks involved in outsourcing these activities?

Answer 1

Value creation activities such as packing material , packers , supporting equipment, manuals etc., can be given by the company to independent suppliers who are experts in that respective fields and have experience. These will add much value to the product of the company . However handing over these to others might have a risk of increased costs, waiting for the material and need for constant checking for proper quality. If these risks are handled efficiently then these value adding activities such as packing will help the company in attracting customers.