1. The Barons of Outsourcing
Electronics manufacturing services (EMS) companies don’t make their own brand-name products
Factories designed to be quickly re-arranged – can make different products for many customers, can run at capacity most of time
Core competency is manufacturing, don’t have to worry about R&D or marketing
Can get cheaper components through volume
Low gross margins, respectable ROE
To broaden services, some contract manufacturers acquiring design and engineering firms, parts suppliers, distributors
Move into design raises interdependence issues

2. Limits of the New Corporation
Can outsource effectively if one possesses what economists call “perfect information”
Know which attributes need to be specified
Technology to measure those attributes must be reliably accessible
If any variation in what supplier delivers, need to know how it will interact with other elements of system
Unlikely when new technologies are emerging