Two stories today caught my eye. Both stories consider the impact of in-house vs outsourced manufacturing. Steve Banker, ARC analyst, considers how outsourced manufacturing and supply chain management is faring in the down economy. He rightly points out that the greatest risk here is on partner viability. I can’t over-emphasize the importance of nurtuing sustainable relationships with suppliers even if that means direct investment as a the bridge to ensure future collaboration beyond this recession.
From an indirect point of view, Bob Ferrari has noted the challenges and subsequent downfall of SONY. He smartly points out their supply chain challenges and the rigidity they brought upon themselves by relying on in-house manufacturing. Contrast that to the cost efficiency of Apple and their strategy of in-house design and outsourced manufacturing, and you can see two great brands heading in different directions. Apple views their supply chain as a critical differentiator. No wonder they were ranked #1 by AMR in their annual Supply Chain Top 25 study.
Two studies have examined the impact of outsourced manufacturing and it’s resilience in the recession. What’s your point of view on this subject?
Tags: AMR Research, outsourced manufacturing, Sony, supply chain, supply chain management, Supply Chain Top 25
May 22, 2009 at 8:24 pm |
I think it all comes down to whether outsourcing is seen simply as a cost-saving measure regulated by contractual agreements or whether it is a strategic decision, where you essentially transfer (the control of) parts of your supply chain to some 3rd party, whose true intentions you cannot gauge for sure. In the latter selecting and nurturing a partnership is imperative. You don’t know who your true friends (i.e. suppliers) are until you’re up against the wall, and when it comes to supply chains, once you outsource, a company is always up against the wall.