Well, that’s a shame. People already have a poor enough perception of outsourcing, due to it often being paired with “overseas”. The fact that it’s screwing up supply chains too is just bad press for the methodology.
I work for Ziptask, a company that makes its bread and butter from outsourcing, so news stories like this get our attention. We’ve faced issues with clients being intimidated by stories like this and by the general idea of someone else handling parts of their business. I wish there was an easier way to get small business owners to realize the potential of the tactic, if it’s well-planned and supported.
Although it sounds like most of these people have not had good experiences by dealing with outsourcing. Would you not be intimidated by someone else handling (screwing up)part of your business?
I agree with the article in that companies fail to adequately account for risk when making outsourcing decisions. I think a major reason for this is that many procurement professionals are judged solely on the bottom line price. A better way to measure the total cost of ownership to the organization (including risk) is to do a comprehensive supplier evaluation. This type of evaluation should include making a weighted spreadsheet in an attempt to quantify intangible risks. When coming up the scores for each type of risk, managers should do their best to use empirical data to back up their score. After a total evaluation has been done, it will be much easier to compare suppliers on categories other than just price. In the long run companies will be able to dramatically cut costs by taking into account the total cost of ownership of a give supplier. However, executive management must first change how procurement professionals are judged before this can begin.
With the string of recent disasters, having a responsive and resilient supply chain is more important than ever. While inventory and warehouse management is needed in a disaster, I completely agree that there must be a larger emphasis on redundancy and communication. Redundancy allows managers to quickly divert resources while communication acts as the glue that holds the entire supply chain together. If you have planned a response ahead of time, you will be less likely to waste time reacting after the fact. By looking at the whole supply chain and coming up with contingency plans ahead of time, companies and governments will be able to be more responsive to the needs of devastated communities.
Well, that’s a shame. People already have a poor enough perception of outsourcing, due to it often being paired with “overseas”. The fact that it’s screwing up supply chains too is just bad press for the methodology.
I work for Ziptask, a company that makes its bread and butter from outsourcing, so news stories like this get our attention. We’ve faced issues with clients being intimidated by stories like this and by the general idea of someone else handling parts of their business. I wish there was an easier way to get small business owners to realize the potential of the tactic, if it’s well-planned and supported.
Although it sounds like most of these people have not had good experiences by dealing with outsourcing. Would you not be intimidated by someone else handling (screwing up)part of your business?
I agree with the article in that companies fail to adequately account for risk when making outsourcing decisions. I think a major reason for this is that many procurement professionals are judged solely on the bottom line price. A better way to measure the total cost of ownership to the organization (including risk) is to do a comprehensive supplier evaluation. This type of evaluation should include making a weighted spreadsheet in an attempt to quantify intangible risks. When coming up the scores for each type of risk, managers should do their best to use empirical data to back up their score. After a total evaluation has been done, it will be much easier to compare suppliers on categories other than just price. In the long run companies will be able to dramatically cut costs by taking into account the total cost of ownership of a give supplier. However, executive management must first change how procurement professionals are judged before this can begin.
With the string of recent disasters, having a responsive and resilient supply chain is more important than ever. While inventory and warehouse management is needed in a disaster, I completely agree that there must be a larger emphasis on redundancy and communication. Redundancy allows managers to quickly divert resources while communication acts as the glue that holds the entire supply chain together. If you have planned a response ahead of time, you will be less likely to waste time reacting after the fact. By looking at the whole supply chain and coming up with contingency plans ahead of time, companies and governments will be able to be more responsive to the needs of devastated communities.