Engineering efficiency: Outsourcing’s impact on OEMs

Triggered by recent high-profile consumer product recalls, outsourced manufacturing has been receiving its fair share of media attention. However, the impact of outsourcing on original equipment manufacturers (OEMs) and the supply chain in general has been largely ignored… until now. Arena Solutions, a provider of the Arena PLM On-Demand product lifecycle management solution, recently teamed-up with Symphony Consulting to shed some light on outsourcing’s impact on mid-market OEMs

09/19/2007


Foster City, CA —Triggered by recent high-profile consumer product recalls, outsourced manufacturing has been receiving its fair share of media attention. However, the impact of outsourcing on original equipment manufacturers (OEMs) and the supply chain in general has been largely ignored… until now.

Arena Solutions

, a provider of the Arena PLM On-Demand product lifecycle management solution, recently teamed-up with

Symphony Consulting

to shed some light on outsourcing’s impact on mid-market OEMs, their outsourced manufacturing services and the customers they serve. Results may help companies use engineering resources and software more efficiently.

The research survey drew responses from over 800 individuals, and some of the responses were surprising, namely:

* 97% of respondents cited communication and collaboration challenges with their outsourced production providers;

* 65% cited particular challenges surrounding new product introductions (with 73% of these respondents stating that such challenges led to production or shipment delays); and

* More than half of all respondents cited measurable, hard-dollar impacts triggered by outsourcing challenges.

For many organizations, outsourcing is a viable and profit-enhancing activity, the companies noted. Without proper oversight and management, however, early financial gains can be dramatically reduced or erased all together. The findings of this study serve to underscore the importance of keeping an open line of communication to all parties involved– designer, supplier and manufacturer. Careful monitoring and management of outsourced production resources can ultimately make the difference between success and frustration.

Arena Solutions offers more details about the .

Manufacturing Outsourcing: Seven Common Pitfalls to Avoid

Prepared by Symphony Consulting and Arena Solutions

This and other whitepapers on control engineering topics are available at the Control Engineering Resource Center .

-Marc Moschetto, editorial director, Control Engineering News Desk





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