Outsourcing in Value Chain

VALUE CHAIN OF GOAT MILK PRODUCT Figure 1: Value Chain of Goat Milk Figure 1 shows the value chain of goat milk product. In order to be end product, there are several processes involved which are process of getting raw material then manufacturing process where the production process will take place. After that, the product will be distributed to the various channels. Under material, there are several parties will involve such as raw material supplier, transportation/logistic and technology supplier.
Then, at the manufacture phase there will be some processes involve such as processing, quality control, packaging and labeling. Packaging will be focus because of most of the producer will outsource this process to other company rather than done by themselves. The reason of this outsourcing will be because of lack of skill and technology for the packaging process. When, the packaging and labeling are done by other company, the product will be not associated to the first owner anymore.
In the case of goat milk, the owner of the livestock is not been recognized anymore and lastly the finish product will be distributed to the user and consumer as a product of the packaging company. Malay proverb call this as “Lembu punya susu, Sapi dapat nama” means the original owner of the product has not been recognized and the product only been associated to the packaging and labeling company. Figure 2: INDUSTRY INVOLVE IN THE PROCESS OF PRODUCING FINISH PRODUCT OF GOAT MILK

Figure 2 show the industries involved in producing the goat milk. As can be seen, Agriculture industry is the first industry involved where the livestock is coming from this industry. Most of the parties involved in this industry are Malay and Indian. Then, in order to package the product, it can be choose whether to use, bottle, box container, can and so on. For box and bottle for example, it will use woods and sand as the raw material to produce box and bottle then, other industry will involve too.
Then, the distribution process will involve with logistic company. Therefore, in producing a bottle or a box of milk, there are many parties and industries involved and take placed. Figure 3 below shows the value chain of the packaging process and the example of many type of packaging container. The figure shows the package is designed using the CAD and has been tested and evaluate before start the production process for the packaging. However, some companies do not use such as technology equipment in doing the packaging.
This kind of packaging process should be done by the producer company and not supposed outsource the process because the outsource decision make the producer lost the originality and owner power towards the product. Figure 3: VALUE CHAIN OF PACKAGING PROCESS Source: www. nec. co. jp ———————– MATERIAL MANUFACTURE DISTRIBUTION PRODUCT USE – CUSTOMER/ USER – WHOLESALER – RETAILER – AGENT – PROCESSING – QC – LABELLING – PACKAGING – RAW MATERIAL SUPPLIER – TRANSPORT/ LOGISTIC – TECHNOLOGY SUPPLIER AGRICULTURE LOGISTIC WOOD/SAND PACKAGING OUTSOURCE!!!!