Wednesday, June 08, 2005

How Outsourcing Facilitated a Sale

From: outsourcing-journal
Company X designs and manufactures devices installed in the ceilings of casinos that allow computers to track the movement of people.
A major manufacturer wanted to purchase the company, but it had a problem with its manufacturing process. Company X's sales force was known for selling whatever its clients wanted; customization became standard. They also promised these customized systems in record time frames, which had its engineers scrambling to make the requested changes. In addition, Company X had a product plant in Ohio that only experienced a 33 percent utilization rate. Together, these gave the company two headaches its new owner did not want.
The solution was to find a contract manufacturer who could engineer, then produce these customized systems for Company X. Outsourcing transformed its traditional supply chain into a build-to-order model.
Now Company X has no inventory or waste. There are now no more fire sales for surveillance gear that's suddenly out-of-date. The outsourcer is only manufacturing what its customers order.
Today Company X's sales force can concentrate on selling systems its customers want instead of the systems they have to sell. This produces a profitable product line for its new owner.
Trend: Engineering Going Offshore to India
While most manufacturers are outsourcing the typical general administration processes like human resources, finance and accounting, purchasing, and IT, the new leap in outsourcing is in electronic manufacturing services (EMS). EMS outsourcers are bundling their engineering functions with the manufacturing of electronic components; this is exactly what Company X needed. Engineering is becoming the new outsourcing frontier.
One of the big trends in EMS is sending more of the engineering work to India, where several new research and development centers have opened. Companies like Company X are seeing the value of sending lower-value engineering jobs to India.
For the best offshore software development and offshore outsourcing services, contact A-1 Technology, Inc, an offshore outsourcing company.