Effective IT Is Key To A Successful Outsourcing Strategy

By | April 24, 2006

One of the fundamental lessons to be learned by SME manufacturers looking to move production overseas is that effective business management systems are an essential element of the framework for building an outsourcing, or offshoring strategy.

In the ‘Role of IT’ section of McGuffie Brunton’s ‘Outsourcing White Paper’, the ERP vendor claims that “despite the obvious advantages made possible through manufacturing outsourcing, many organisations find it difficult to effectively incorporate overseas partners into their business practice, and so establish viable outsourcing or offshoring programmes.”

Furthermore, McGuffie Brunton states: “As has been shown, there are various obstacles that companies have to overcome, with many related to the mechanisms of gathering data, analysis and sharing information in a timely manner. Any solution that can enable companies to better perform these tasks can help reduce risks and significantly improve the potential for outsourcing and offshoring to deliver a substantial return on investment.”

Commenting on the White Paper, Howard Joseph, Sales Director of McGuffie Brunton, said: “We set out to examine the growing trend of smaller firms following in the footsteps of larger manufacturers in moving some, if not all, of their production to lower cost base countries. The document also addresses the issues and problems surrounding such a major move, how to avoid the pitfalls; how businesses can make anticipated gains and the pivotal role that information technology can play in making it a successful venture.”

The White Paper draws upon the findings of recent reports and studies on the subject of outsourcing/offshoring, and the typically positive experiences of a number of McGuffie Brunton customers. In the case of Premier Percussion, one of the world’s largest producers of wooden drums, a SYSPRO 6.0 ERP system is at the heart of the drum maker’s relatively complex business model, which incorporates production at the company’s UK factory and outsourced facilities in Taiwan and China.

For AMOT, a company that provides industrial control solutions for the global gas, oil and power industries, staying with the same system in the UK and China also brought major advantages through significant costs savings in not having to retrain or re-educated staff with a new system. Using SYSPRO has allowed AMOT in the UK to keep track of the production process in China, making sure that production runs smoothly and the employees understand the system.

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