In years gone by, companies created what they sold, or directly provided the services marketed to their customers.
Then, along came outsourcing. The process involves trusting another person or entity to create or perform a component for your business in a timely manner. Just-in-time manufacturing honed this model to a fine edge, with inventory or staff available precisely when required.
Outsourcing can mean off-loading headaches, cost controls, and wait a minute maybe even handing off profits. If another company can make money on a snack stand, why not maintain control and make the money yourself? If the outsourced operator has multiple operations, quantity-discount buying power and deep efficiencies of scale, perhaps both sides can share amiably.
Automakers turned to outsourcing thousands of components, only to be surprised and shut down by strikes at their suppliers. A factory relying on multiple vendors leaves itself open to tremendous vulnerabilities. My outlet store sold garments from a vertical manufacturer who purchased untreated yarn. From that point forward, the process knitting of the goods, dyeing, finishing, cutting, sewing and packaging was controlled under one roof.
I’m a do-it-yourselfer until the impossible-to-do-it-myself becomes reality. More than a year ago, I outsourced a project I could not possibly do myself. Twelve months and still counting, the item is held hostage without benefit of reply to numerous requests, and my company is without a very important marketable product.
Previous to this incident, I voted for in-house whenever possible, and I still do. In-house equals control, yet if small businesses are to expand and grow, we cannot possibly possess all the skill sets and equipment to go it alone.
Charlene Maurer Finerty owns Plans and Profits, primarily a business plan writing service. She also presents workshops, teaches business plan writing and cleans up unorganized offices and backlogs. For more information, go to plansandprofits.com, call 343-1515 or e-mail charlene@plansandprofits.com. Her column appears Thursdays.
Source:http://www.recordonline.com/apps/pbcs.dll/article?AID=/20100708/BIZ/7080324/-1/SITEMAP
