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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