Wednesday, September 10, 2008


Outsourcing has become widespread in many business areas, most predominant being in the realm of IT projects. If India is a leading country for outsourcing it is because of the highly developed skills and relatively low cost of human resources as compared to affluent countries. How long this bubble will last, no one is certain, with East Europeans,  Chinese and South Asian countries like Vietnam, Korea, Thailand, Philippines etc catching up fast. Earlier brain drain was considered damaging to the country's future as bright youngsters with engineering and medical degrees tended to migrate to western countries seeking greener pastures. Outsourcing helps to retain these skilled personnel within India which is a mutually convenient arrangement for outsourcing countries as well as service provider. It is another matter that there is a huge hue and cry in countries sending out jobs under Business Process Outsourcing( BPO) by the
local citizens fearing large scale unemployment.

In the food area contract manufacturing exclusively for export to a particular country is itself an outsourcing as the products are made for the foreign buyer. Large conglomerates like Wal Marts and others outsource many products in their retail basket from many countries in Asia, Africa and South America valued at billions of dollars an year. While this comes under the global trade protocols involving WTO as well as bilateral agreements, what about the possibility of outsourcing within the country as intra trading within the industry or as a consumer service? Ancillaries industries already working in the food sector and contract manufacturing in vogue to a limited extent where big label industry gets their products from small scale sector, can achieve tremendous growth if suitable incentives are provided from the government. Synergy between small processors and large corporates is the only way for the food industry to grow with the latter
providing the marketing muscle so necessary to establish the credibility and credentials of small enterprises amongst the consumers. It does not make any sense to build up production capacities if adequate demand is not generated through resource intensive promotional efforts.

Food outsourcing is similar to business outsourcing but the service provider offers both products as well as the delivery service. It may be a glorified version of the humble vegetable vendor who pushes his push cart house to house every day, selling his wares but very relevant and appropriate to the situation in India. Originally pioneered by Pizza companies, the service provider takes orders from households willing to outsource their foods and delivers the product in prime condition. An improvement in this is that the service provider almost replicates the service of a restaurant, the only difference is that the food is served at the client's place. It is more or less like a mobile restaurant but much more sophisticated in terms of standards and range of foods offered and service provided. In India with the working family system taking deep roots, such a service may become lucrative if right entrepreneurial approach is adopted. Imagine a family of
5 enjoying a 10-course dinner served at home piping hot without lighting the kitchen stove! Home clusters, increasingly being established with hundreds of individual family units in a concentrated place in the ever growing urban conglomerates, open up vast opportunities for food outsourcing business. Design of central kitchens, mode of presentation, delivery logistics, safety and hygiene of the products and aesthetics of service all need attention and the catering training institutes in the country must pull their resources to evolve models appropriate to the country.    

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