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Saturday, February 21, 2004A Mckinsey quarterly report on outsourcing is full of supportive arguments for outsourcing -based on among other things considerations of cost, faster turnaround, better quality, good analytical capability to validate design for production, high quality management bandwidth etc ..Indeed, Salomon Smith Barney estimates that because the top five computer original-design manufacturers have full responsibility for sourcing and supply chain management, their inventory turns are 35 percent faster than those of the top five electronics-manufacturing service vendors. In industries such as computers, where prices fall rapidly and the frequent introduction of new products increases the risk of obsolescence, tight inventory management can be especially valuable. The same compelling economics and capability-building opportunities are beginning to drive similar movements in other manufacturing businesses, including apparel, automotive products, cellular handsets, consumer electronics and medical equipment. Trend to note - Dell, Gateway and Hewlett-Packard are using offshoring to challenge consumer electronics stalwarts such as Philips, Samsung and Sony.
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