Managing Automation - December 2007 - (Page 31) [ SPECIAL REPORT] the Answer? Outsourcing various business processes and operations to offshore partners may be a good business strategy, but unless these complex relationships are properly managed with the right tech tools, they can go awry. BY MARTY WEIL tomation n today’s turbulent global economy, manufacturers seeking the refuge of offshore markets to trim labor costs are severely underestimating the requirements for the ongoing management of their outsourced processes. Anyone who doubts this assertion need only look as far as the 2007 headlines about Mattel and other U.S. companies that were bitten by defects in products outsourced to China and other “low-cost” countries. “Manufacturers need to understand that their work is just beginning at the time the outsourcing contract is signed,” says Vinay Gupta, founder and CEO of Ann Arbor, Mich.-based Janeeva, a provider of outsourcing relationship management (ORM) software. “Outsourcing, by its very nature, breaks the management infrastructure — no more ‘managing by walking around’ — and outsourcing breaks the IT infrastructure as companies are not able to rely on a captive enterprise environment and onpremise software tools.” Outsourcing is a complex business relationship, one that can’t be fully automated. And while no one claims that technology is a panacea for fixing all of the problems as- sociated with outsourcing, manufacturers can benefit greatly from the strategic deployment of technologies designed specifically for managing outsourced processes. Conversely, those that fail to properly automate may continue to suffer debilitating setbacks. According to Gupta and other outsourcing experts, manufacturers are still attempting to manage complex outsourcing operations using simple desktop tools, such as e-mail, spreadsheets, file sharing, and a host of other applications. However, these simple tools generate data that is already obsolete by the time reports are generated. In some cases, manufacturers have tried to adapt legacy ERP and MES systems to do the work. While better than desktop tools, legacy systems can be cumbersome and expensive to manage, and they are not readily able to interface with offshore data sources or provide the type of capabilities that outsourced processes mandate. Julie Fraser agrees that there is a fundamental mismatch between existing enterprise systems and outsourcing. “Existing systems really aren’t well-designed for it,” says Fraser, a principal and industry December 31 2007 Photo: Glowimages Photo: Amanda Rohda
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.