Situation: A CEO is looking at an outsourcing opportunity in Asia. If a suitable partner is found, this will be the company’s first experience with outsourcing. What is the experience of others who have outsourced either parts or assemblies to a foreign supplier? How do you reduce risk when outsourcing?
Advice from the CEOs:
- Outsourcing to a foreign supplier is not low risk.
- Find another CEO who has experience in outsourcing.
- Consider hiring a consultant who specializes in foreign outsourcing.
- Once a promising opportunity has been identified, select and put in place a trusted individual on-site who can stay abreast of developments and issues and who can alert the company on both potential opportunities and problems.
- Execute key initiatives by treating this opportunity like a customer’s project.
- Prioritize.
- Set project time in percentages or dollars.
- Allocate an appropriate budget.
- Institute an appropriate job/project tracking system for outsourced projects.
- Hold people just as accountable as if this were a project for a customer.
- The internal “customer” should be just as demanding as an actual customer.
- Reduce the risk in staffing.
- Identify requirements.
- Agree on expectations, then delegate and trust.
- Two way communication is critical.
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