Subscribe    |    Sponsors    |    About Us   |   Contact Us                

Current Stories
More Stories

Assess for success before moving to Windows 7 - May 2010

Guidelines for Maximizing Your Return on Remote Infrastructure Management Outsourcing (RIMO) - May 2010

In Tight Times, Ignoring Process Improvement Increases Business Risk - April 2010

Real Time Knowledge Acquisition and Analysis: Fusing Data Objects for Multi-Factor Unstructured Data Correlation - April 2010

Reinventing Your Infrastructure with IIMv3 - February 2010

Noiseless Transition: Infosys enables T-Mobile UK to faster realise the benefits of outsourcing its Finance Directorate Functions - February 2010

How the Right Health Information Technology Solution Can Pump New Life Into State Healthcare Programs - November 2009

A New Era in IT: Cloud Computing Takes Center Stage: How to Assess Cloud Options and Optimize Clouds for Security and Other Specificiations - October 2009

Achieve Lowest Total Cost of Ownership with a Unified Global Delivery Model

The Software Testing Edge: Innovative New Tool Suite Enhances Productivity

Seven IT Strategies to Help Survive the Downturn

How Organizations can Elevate Business Performance through Advanced Document Process Management

Industrialize Your Applications Delivery to Achieve High Performance

The Power of Partnering in Accomplishing Your Green IT Agenda

Taking a New Approach to Business Challenges Using Managed Services IT

Gaining Greater Performance and Flexibility from Next Generation IT Outsourcing

Company X designs and manufactures devices installed in the ceilings of casinos that allow computers to track the movement of people. (The NBC show "Las Vegas" demonstrates their use in casino surveillance.)

A major manufacturer wanted to purchase the company, but it had a problem with its manufacturing process. Company X's sales force was known for selling whatever its clients wanted; customization became standard. They also promised these customized systems in record time frames, which had its engineers scrambling to make the requested changes. In addition, Company X had a product plant in Ohio that only experienced a 33 percent utilization rate. Together, these gave the company two headaches its new owner did not want.

The solution was to find a contract manufacturer who could engineer, then produce these customized systems for Company X. (Everest was the advisor in this transaction.) Outsourcing transformed its traditional supply chain into a build-to-order model.

Now Company X has no inventory or waste. There are now no more fire sales for surveillance gear that's suddenly out-of-date. The outsourcer is only manufacturing what its customers order.

Today Company X's sales force can concentrate on selling systems its customers want instead of the systems they have to sell. This produces a profitable product line for its new owner.

Trend: Engineering Going Offshore to India

While most manufacturers are outsourcing the typical general administration processes like human resources, finance and accounting, purchasing, and IT, the new leap in outsourcing is in electronic manufacturing services (EMS). EMS outsourcers are bundling their engineering functions with the manufacturing of electronic components; this is exactly what Company X needed. Engineering is becoming the new outsourcing frontier.

One of the big trends in EMS is sending more of the engineering work to India, where several new research and development centers have opened. Companies like Company X are seeing the value of sending lower-value engineering jobs to India.

Companies who don't consider engineering a part of their core competency or the basis of their competitive edge are saying, "Why not outsource it?"

Publish Date: February 2005

Copyright © 2005 - Everest Partners, L.P.

[Previous Story] [Next Story]