To outsource, according to Merriam-Webster, is to procure something such as goods or services, using outside sources, especially, but not necessarily, from non-union or foreign entities. Many believe that the origin of outsourcing can be traced to the period from about 1760 to 1840, known as the Industrial Revolution. It was during this era that Europe and the United States saw a progressive transition from independent manual craftmanship to mechanized manufacturing processes. Our premise, however, is that examples of outsourcing can be found throughout human history. For instance, when ancient armies and navies required weapons and ships, the demand was often met by specialized independent craftsmen such as blacksmiths and ship builders, an early form of outsourcing.
The basic idea behind outsourcing connects to the recognition of organizational “core competencies,” the things we do that give us a competitive advantage. The core competencies of the McDonalds restaurant chain, for example, are trained staff, efficient processes, strategic locations and recognizable brand. While McDonalds operates over 38,000 owned and/or franchised restaurants, suppliers like Tyson Foods, Hildebrandt Farms and others are the sources of their bakery supplies, meat, fish poultry, produce and dairy products required to fill McDonalds menus.
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