E2Open – January 2016 (SCMR)
Outsourcing manufacturing is becoming a well-established approach for companies that want to strategically manage materials in today’s fast-paced business environment.
As a result, manufacturers see various benefits from outsourcing to reliable manufacturing and logistics partners. These include cost and asset reductions, access to skilled labor, third-party design, and manufacturing expertise. Along with the ability to quickly scale production up or down. Also an outsourcing strategy allows brand owners to focus on their core competencies. These include design, brand management, and sales, while relying on partners to manage manufacturing and distribution.
But has the promise of outsourcing truly been fulfilled over the past two decades?
Because of this, Peerless Research Group (PRG), on behalf of Supply Chain Management Review and E2open, conducted a survey of 94 top supply chain executives in companies with US $250 million or more in annual revenues. The survey was commissioned to assess the current state and future plans for outsourcing manufacturing.
Researchers sought to better understand:
- how companies outsource their tasks;
- what the outsourcing forecasts look like for the next couple of years;
- what level of visibility there is over the end-to-end process; and
- how technology is being used to manage the process.
Finally, while feedback from respondents was varied, it’s clear that outsourcing is here to stay. Even with the current trends of reshoring, outsourcing remains a key strategy for most firms. While they may tactically “reshuffle” or re-balance in-house vs. outsourced manufacturing, there does not appear to be a wholesale move away from reliance on outsourcing. Read other executive briefs.