Project Experience

Use of Information Technology to Support Outsourcing Manufacturing

Client Situation
Our client, a mature telecommunications company, saw a press release from a key competitor announcing a major change in its manufacturing strategy. The competitor decided to outsource a large portion of its manufacturing and close half of its plants. Our client decided that it needed to understand both why this competitor choose this path, but also to understand the benefits and issues of outsourcing at a second competitor who partners for all manufacturing. The client was especially interested in the use of information technology to support the outsourcing of these major activities.

Fuld Approach
Fuld & Company interviewed managers at the two target companies to determine why and how the decision to outsource was made. The contract manufacturers provided additional information on how the companies used IT to speed up information flow which reduced costs significantly.

Benefits and Implications
Fuld & Company discovered that both competitors made the decision to focus on their core competencies which did not include manufacturing. However, both companies kept selected functions in-house, which they viewed as crucial to their customer satisfaction goals. Both companies viewed their investments in IT as essential to being able to work effectively with outside firms. The client decided to review its own operations to determine which could be outsourced and which should be retained for strategic reasons. For more information on use of information technology to support outsourcing manufacturing, please contactMark Chodnowsky at mchodnowsky@fuld.com