Extended Supply Chain & Global Complexity Super Session -
Offshoring: Blessings & Perils
Wednesday, June 25, 2007 9:30 am - 3:30 pm
Friday, June 27, 2008 8:15 am - 12:30 pm
Presented By:
Dr. George Haley Ph.D., University of New Haven
Session Abstract
RIP Gibson Greetings
Gibson’s White Knight
Outsourcing’s modern evolution
Outsourcing goods
Outsourcing services
The supply chain quandary
Financial community’s demand for ever greater returns
In 2000, the average book-to-market ratio was six times what it was in 1981
Lowering costs is the primary focus
The Analysts’ outsourcing mantra
Shed assets, shed production – become a problem solver, a product designer and marketer, an innovator, a ‘supply chain integrator’
The benefits of outsourcing
The benefit of cost
The benefit of talent acquisition
The benefit of service enhancement
The benefit of time compression
The China Price and outsourcing
The Supply Chain Reality
Within two years – 20 to 25 percent of supply chain relationships fail
Within five years – 50 percent of supply chain relationships fail
70 percent of buyers assert that:
Suppliers did not understand their needs
Suppliers provided poor service
Supply costs were higher than expected
The Perils of outsourcing
Generally Known Perils
The perils of communications difficulties
The perils of logistical difficulties
The perils of improper manufacturing
The perils of lead time expansion
The perils of quality control failure
The perils of intellectual property theft
Lesser Known Perils
The perils of ‘Send me a sample & I will build it’
The perils of pricing pressure
The perils of lead time inconsistency
The perils of relocation’s hidden costs
The perils of capital commitment inertia
The perils of intermediary dissatisfaction
Unknown Perils
The perils of supply chain fragmentation
The perils of supply chain substitution
The perils of reliance unknown
The perils of brand/corporate equity destruction
The perils of new, here-to-fore unknown shortcuts
The perils of capability loss
The perils of increased business risk
The perils of a ‘Lumpy, not Flat, World’
Solutions
-
On-the-ground presence – you have to have your own people on the ground and visible to your supply chain
-
Pro-active investigation – your on the ground people must actively seek out potential problems and set things straight
-
Contractual requirements – make sure your requirements are spelled out specifically, including the requirement to work with your on-the-ground people
-
Expanded/creative quality control – standard quality control operations are not sufficient, you must consider potential problematic solutions never before considered
-
Limit sourced-product complexity – as the complexity of products sourced from overseas emerging market suppliers increases, the difficulty of maintaining control over quality increases exponentially and rapidly becomes impossible
-
Develop truly rational expectations – develop revenue projections based on true market size, competitive environment and performance norms, not on potential market size and the top performers; develop cost expectations based on total cost of necessary additional activities, not on total costs of standard operating procedures; recognize the unknowns and how they may reflect benefit busters
-
Develop a trust capable supply chain – reward those suppliers that prove reliable, trustworthy and willing to learn how to meet your needs,replace those that do not
Copyright 2005 -
Distribution Business Management Association - All rights
reserved.
Privacy Policy Webmaster Remove from
Database