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Outsourcing Strategies

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Presentation on theme: "Outsourcing Strategies"— Presentation transcript:

1 Outsourcing Strategies http://www.managementsupport.com

2 The Relationship Between Quality and Costs
Lowers Rework and Scrap Costs Increases Productivity Warranty and Rework Costs Improves Performance Reliability Service Costs Manufacturing Costs Profits Figure 16.1

3 Product Factors Value-to-weight ratio.
Influences transportation costs. High value-to-weight. Electronic components. Low value-to-weight. Bulk chemicals. Does the product serve universal needs? Industrial products. Modern consumer products. Handheld calculators. Personal computers.

4 Possibilities TECHNOLOGY DESIGN MANUFACTURING SERVICE Components
Modules Products Electrical Mechanical Industrial DFX (test, manufacturing, supply chain, etc.) Systems New product introduction Prototyping Subsystems manufacturing (e.g., PCB assembly) System assembly Logistics and fulfillment Repair End-of-life product management

5 Contract Development Operational Discussion Volumes Final AVL
Schedule and timeline Forecasts Cycle times Lead times, especially long lead time parts Seasonality Quality expectations & other metrics Change orders Kanbans Semi-finished goods Stocking What if there are failures?

6 Engineering Change Orders (ECOs) and Change Management
Initiating An ECO Change requests can be originated by the customer or CM, typically at the weekly meeting Typical issues include: Product revision Component feed format change [e.g., tape & reel  tray] Supplier change Replacement of part X due to low ICT yield The CM Response CM reviews now-obsolete material on hand or on order We develop a response proposal according to the urgency of Customer need


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