Lessons from the Road, a global sourcing blog
Lessons from the Road is a blog focusing on the strategies and challenges of global sourcing in today’s supply chain. Blogger Michael Higgs is a working supply chain professional and writes about his travels in meeting with suppliers in low-cost regions around the world.
Back to Basics: The RFP for outsourcing
(Note: This post is a continuation of Michael Higgs’ previous “Back to Basics” blog post on outsourcing.) Now that you have your documents and you know what you are looking for, you can put your RFP together. You should also have defined the suppliers that you would like to target, but before you share anything, get your NDAs (non-disclosure agreements) signed and filed. For t ...... Read More
Comments (3)Back to Basics: The tools and resources you need for outsourcing
A reader recently indicated that I should lose the buzzwords and platitudes in my blog posts and focus more on real-world advice. And while some industry jargon and terminology is always required, I agree, too much is not helpful. So with that in mind, here are some real-world tips:To outsource you need a team that: Buys into outsourcing Knows the product/products/processes Has credibility with hi ...... Read More
Comments (1)Fundamentals of Outsourcing
A reader recently commented on one of my previous posts about outsourcing to say, change in a business environment “can be compared to a large ocean liner changing its course.” So the question is, having this knowledge, how do you implement change at your organization?Interesting you should use a ship analogy, as this is my favorite way to explain changing course. The best analogy I ...... Read More
Comments (1)When it comes to outsourcing, walk (around the block) before you run
One of the most common mistakes companies make when deciding to outsource is jumping over the edge and trying to do it quickly and to the lowest cost geography in an effort to see immediate savings. The problem with most companies who have not outsourced before is that their process won’t easily allow it to happen. I am not talking about ERP systems-I am talking about building and testing t ...... Read More
Comments (2)Transitions to China can be a cost advantage or disadvantage
One of my readers pointed out that there is a distinctive spin up time or transition time in China for new builds. I agree generically with what they said, but if it is like a current product (that they build today) than that transition time is cut down to a 1/3 or sometimes 1/8. That is, unless you have distinct processes for that part and then you jump right back up. First time awards are ...... Read More
Comments (0)10 issues to look for when you start dealing with China suppliers
Transportation routes. If your parts are going to cross multiple provinces there can be extra costs involved. Localization of components. Cost, quality, reliability and delivery are the first concerns. But localization tends to take a long time—sometimes as long as six months–so count on extended times to get this completed. Turnover. Your middle management and up tends to hav ...... Read More
Comments (1)BKMs (Best Known Methods) are only good if you adapt them
Over the last few weeks I have talked a lot about change with my clients, and the common question is “what do others do?” I tell them what some companies do that I believe are a good fit for their business model, and we might implement some of those ideas, but at the end of the day it always is slightly different. As a kid, I loved to play sports and my best friend’s ol ...... Read More
Comments (0)Plant tours: Don’t slip on the hype
Everyone says that the first impression is the one that lasts, so if you’re a purchasing professional, most suppliers will want to schedule you for an overview of their company, and then go on a plant tour. As sourcing folks we all have had to do audits of some type, and a plant tour is like a mini-audit. The suppliers are trying to show you the best side of their business and you woul ...... Read More
Comments (0)Leadership Needed
Before I get to my main topic, a reader recently asked about what to take suppliers as gifts. I normally try to take something from my state, (since they drink a ton of tea) a nice coffee mug or something along those lines. Anything will be appreciated, but one note, I usually don’t take anything for the higher up folks, I tend to focus my gift giving on the folks that work on stuff for me ...... Read More
Comments (0)Does Asian outsourcing still make sense?
Before I get to my topic today a reader wanted to know when I was last in China and am I still focused on outsourcing. My last trip to Asia was in late January and into early February. And my consulting focus is helping companies figure out the what, when and where of outsourcing. In the current economy, outsourcing to Asia may or may not make sense. I have recently helped a company re-patriot som ...... Read More
Comments (1)Seven cost modeling comparison points
After posting my last blog a couple folks asked what things I look for in cost comparison, so I have listed them below. I will provide a caveat by saying these items work well for me, and while they are not all encompassing they do require you to do some home work. I have said this before, and I will say it again: Keep it simple! One of my good friends uses about 15-20 points, and while I thi ...... Read More
Comments (2)Total cost comparison model
After my last blog post, a reader named Steven commented that “In a total cost comparison, how often do people look at the cost of quality properly. Can the suppliers support quality needs, including visit support? If the part is very easy, maybe it’s not not a problem. But if it has difficult aspects, you could find costs of non-quality not considered. I have often used a factor in ...... Read More
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