Ask the Experts: Manufacturing | Article

outsourcing-manufacturingThis month’s expert is Mike Atwood, Everest Group’s Industry President for companies in the manufacturing, distribution, and retail industries. He has led more than 10 large-scale, multi-function ITO/BPO business transformation initiatives for Fortune 500 enterprises. Before joining Everest, he managed EDS’ General Motors business during the birth of lean manufacturing.

Q: We have a combination of sunsetting IT infrastructure at our manufacturing facilities and some sunsetting products that we still need to support for our end users. What is the best approach for determining whether we should be outsourcing our sunsetting support needs or whether we should be outsourcing the enabling IT and processes for our new product development initiatives?

A: Infrastructure at plants is usually split into an infrastructure that connects to the corporate applications (finance, sales, etc.) and the infrastructure that connects, monitors, and controls the devices in the plant. I’m assuming you are speaking of the former infrastructure. This makes the question one that is not so much plant related as corporate related where the plant is just a piece of the entire infrastructure. What you need to do is decide if you really need to be in the IT infrastructure business. Outsourcing providers can make these sunsetting questions obsolete and provide the flexibility that you appear to need.

Q: Up to now, we have not been outsourcing, although we have some of our manufacturing functions contracted out on a piecemeal basis. We are now considering outsourcing some processes and are aware that there will be some resistance at several levels of our company. What are the primary success factors in ensuring the effectiveness of a communications plan for the enterprise to understand and buy in to our outsourcing strategy?

A: Communication plans are dependent on corporate culture. I’ve never seen a culture that keeps secrets well. So the best advice is to communicate often and accurately. If you’re considering outsourcing, but haven’t made a decision, tell the interested people. You want to make your official channel the source of all good, timely information. This may create a situation that some people don’t like, but if you don’t do this you’ll have to respond to rumors that may be wildly inaccurate and which you may not become aware of until after much damage is done.

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