The Boeing debacle: Seven lessons every CEO must learn

This article by Steve Denning published by Forbes is doing the rounds at present. It's highlighting the mechanical problems faced by the 787s that is costing Boeing more money on a project that was already over budget. But it's not specifically a Boeing bashing piece.

It highlights the 787 project as one example as part of the broader issue of offshoring.

1. Use the right metrics to evaluate offshoring
2. Review whether earlier outsourcing decisions made sense
3. Don't outsource mission-critical components
4. Bring some manufacturing back
5. Adequately assess the risk factors of off-shoring
6. Adequately value the role of innovation
7. Get to the root of the problem: maximising shareholder value

You can read the whole article here and while I believe it provides a good rationale for approaching the question of offshoring for enterprises, it also provides some good foundations for an industry policy.

When companies shouldn't outsource manufacturing

An excerpt from an article in Industry Week, by Jeff Wallingford, vice president, Supply Chain Strategy, Riverwood Solutions.

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The trend to outsource manufacturing has been going strong for two decades. Recently, it has been popular to speculate on whether this trend has gone too far... There are still many cases where a company may benefit by choosing in-house manufacturing over outsourcing - but only when these cases truly apply:

• a company's manufacturing process is the source of its competitive advantage
• a firm does something in a unique way and does not want competitors to know how to do it
• a competitive market for the specific manufacturing service does not exist
• there is no opportunity for the service provider to leverage their fixed capital, common overhead, specific purchasing power, or expertise
• to capture a limited and critical resource or channel
• it is too costly to outsource the manufacturing process because of the additional costs driven by outsourcing

Click here to read the full article.

Manbulloo heats up export competitiveness

In 2010, only 44% of Manbulloo mangoes met the required standard for export to Japan, China and Korea.. In monetary terms, this meant a $20K-$30K loss for just one batch. By the end of the project with QMI Solutions, the plant was operating effectively – more than 80% of Export Premium mangoes met the requirements, with negligible losses due to heat damage.

Through the project we were able to save Manbulloo approximately $500K per year.

Click here to read the full article.