How does outsourcing improve production efficiency?

Production outsourcing, also known as manufacturing outsourcing, is a management strategy that entrusts production to excellent external specialized resources by external processing to reduce costs, spread risks, improve efficiency and enhance competitiveness, that is, outsourcing some non-core businesses or processing methods traditionally handled by internal personnel to professional and efficient service providers to make full use of the best external specialized resources, thereby reducing costs, improving efficiency and enhancing competitiveness.

The business model of production outsourcing has a history of nearly 200 years, but it has really developed in the past ten years. With the intensification of economic globalization and competition, many multinational companies have moved their production bases to Asia, including China. Ericsson, for example, outsources all mobile phone production except China to Flextronics. Baoyuan Shoes accepts the production outsourcing business of Nike, Adidas and converse respectively. According to the research of professional departments, the implementation of outsourcing strategy can save 9% of product development costs and improve the production capacity and quality by about 15% on average.

Production outsourcing has ended the self-sufficient organizational model, outsourced most non-core technologies and processes to others, and distinguished core technologies from competitors, which has become the same practice of successful enterprises all over the world.

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The difference between production outsourcing and traditional production mode

As a brand-new mode of production and operation, what is the attraction of production outsourcing that makes top decision makers so eager? The fundamental reason is that it improves the shortcomings of the traditional mode of production and has many advantages compared with the traditional mode of production.

Traditionally, due to the need of management and control, enterprises have always adopted a "vertical integration" management model for activities and resources related to product manufacturing: either they expand their own scale or they participate in the enterprises of suppliers and sellers, and the enterprises that provide raw materials, semi-finished products or parts from the colonies form a kind of ownership relationship.

"Vertical integration" is still reasonable in a relatively stable market environment, but in the case of shortened life cycle of magnetic products, intensified competition among enterprises and unpredictable global market, it shows various defects: it increases the investment burden of enterprises; Take risks such as long capital construction period; Forcing enterprises to engage in business activities that they are not good at; Directly facing many competitors in every business field, and so on. As a result, the resources and energy of the whole enterprise are scattered, the core business cannot be managed well, and the competitiveness of the enterprise is weakened. Therefore, after the 1980s, more and more enterprises in the world abandoned this business model, and the idea of using external resources of enterprises to quickly respond to market demand emerged, so as to win the competitive advantage with low cost, high quality and early listing. This is the so-called "horizontal integration" idea. Formed a "network chain" that runs through all enterprises, from suppliers to manufacturers to distributors. Obviously, these enterprises must realize synchronous and coordinated operation, so that all enterprises in the value chain can benefit, so the concept of value chain management came into being. The implementation of value chain management has brought remarkable benefits to enterprises.

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Principles of production outsourcing

First, outsourcing should be adopted.

1. The load is greater than the capacity.

2. The self-made cost is greater than the outsourcing price.

3. Outsourcing can get better quality.

4. Technology can't solve or there is no special equipment manufacturing.

Second, outsourcing should be avoided.

The materials supplied by 1. are extremely expensive.

2. Articles are easily damaged or the quality is easily changed.

3. Large volume and weight, more transportation and miscellaneous fees, but less processing fees.

4. A small number of contracts, and the amount is not large.

5. The product or component being developed, quality and delivery date are not easy to master.

6. The outsourcing price is similar to the self-made cost.

7. Have the consideration of disclosing special technology or secrets.

8. The outsourcing quality and delivery date do not meet the requirements.

9. The operation and quality of outsourced products have a significant impact.

10. It is difficult to check the product, and process control is needed.

1 1. The outsourcing price is greater than the self-made cost.

Third, outsourcing management work items

1. contracting operation: determine the appropriate price/quality/delivery time/quantity/other trading conditions.

2. Receiving and dispatching management: The receiving and dispatching materials/receiving and returning materials calculated according to the specified loss rate and standard bill of materials shall comply with the regulations of the central factory.

3. expediting management: implement follow-up management/use follow-up boxes in advance.

4. Acceptance management: formulate acceptance management measures/quality control/formulate management measures for incoming inspection of outsourced products/disposal measures for unqualified products/hold quality coordination meetings when necessary/strengthen the management of acceptance center.

5. Accounting management: regular inventory management.

6. Supplier management: Carefully select and develop third parties/set up a third-party investigation team/establish a third-party development and selection processing program.

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Steps of production outsourcing

Production outsourcing has the following steps:

Determine the type of manufacturer: according to the size of your company, the number, amount, quality requirements and technical requirements of outsourcing, determine the scale and level of the manufacturer to be selected.

Looking for outsourcing vendors: according to the above requirements, start looking for vendors. And ask them to fill in the "supplier/outsourcer questionnaire" to introduce their basic situation.

On-the-spot investigation: Select several companies that meet the basic requirements and organize personnel from production, technology, quality, materials and other departments to conduct on-the-spot investigations on all aspects of production and operation of various factories.

Determine the manufacturers to be selected: according to the feedback from various departments, choose several good ones. Please provide corrective and preventive measures for the problems found in the inspection. When necessary, organize two on-site inspections.

Selection of quotation manufacturer: according to the implementation of corrective and preventive measures of each company. Select the quotation manufacturer.

Manufacturer's quotation: send the quotation drawings and documents to the manufacturer (note: the manufacturer should be required to sign a confidentiality agreement before). You can ask each manufacturer to quote your company in a fixed format and give details (materials, labor, management expenses, profits), which is more convenient for analysis and comparison. Accept the offer.

Selected manufacturers: quotation analysis. Choose the right one.

Sample certification: provide manufacturing documents to the selected manufacturers and manufacture several or dozens of samples. It is inspected and certified by the company's technical and quality personnel. If it is unqualified, it is required to re-prepare samples and provide corrective and preventive measures or directly unqualified.

Production certification of small batch products: the samples are certified and hundreds or thousands are produced. Personnel from production, technology, quality and materials departments are organized to go to the site to certify all aspects of the production organization of the factory. And provide corrective and preventive measures (impossible without problems, J).

Outsourcing certification: the implementation of corrective and preventive measures is good and can be certified.

Follow-up: Quality determines how many batches need to be inspected in advance and the proportion of the next inspection, which helps manufacturers improve their quality until they are exempted from inspection. Can also be stationed in the factory to solve any problems, supervise the delivery and quality, as well as the manufacturer's manufacturing costs.

Regular price reduction+regular on-site inspection.

Note: Steps 3 and 6 can be interchanged according to the specific situation.

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Prerequisites for implementing production outsourcing

The successful implementation of production outsourcing strategy requires the enterprise itself to have certain preconditions.

Brand advantage: brand is the biggest advantage of enterprise outsourcing production, because only on the basis of brand management can enterprises add added value to products; At the same time, excellent brands make manufacturers more willing to accept the outsourcing business of enterprises.

R&D capability: The rapid change of customer demand requires enterprises to constantly create new products to meet their personalized needs. Only with strong R&D capabilities can production outsourcing form a virtuous circle, producing a batch and developing a batch. Otherwise, the appearance of similar competitive products will rapidly erode the core competitiveness of enterprises.

Marketing network: the core driving force of modern enterprises is order, otherwise, outsourced products can only be a pile of inventory. If you have a strong marketing network, you can quickly deliver products to customers, shorten the period of capital withdrawal, and enable enterprises to enter a new round of product outsourcing.

Control ability: production outsourcing reduces the management and supervision of production links, but it may also increase the possibility of corporate responsibility moving abroad. If you can't effectively control the partners, the market is likely to be taken away by your own products. This requires enterprises to have strong control, constantly monitor the behavior of outsourcing enterprises and strive to form a good long-term cooperative relationship with them.

Production outsourcing not only puts forward certain requirements for enterprises, but also has certain restrictions on partners. It requires them to have strong production capacity, including advanced production equipment, qualified technology, skilled staff and rich production experience and other factors that reflect their core competitiveness. At the same time, it also requires partners to have a good reputation.

Benefits of outsourcing:

1, flexible employment

Under the condition of market economy, many employers' business changes greatly, or their industry specificity is obvious in the off-season. Adopting the employment form of production outsourcing, increasing business and increasing personnel can increase production lines, while reducing business can reduce production lines. The company has flexible employment and is not limited by staffing, and the outsourcing company provides professional services for personnel entry and exit procedures.

2. Cost reduction

When calculating the total expenditure of production outsourcing, employers should first consider the post benefit. The second is to set wage standards at market prices. Third, the ratio of fixed wages to floating wages can be adjusted independently. According to comprehensive accounting, the expenditure of the employer in outsourcing production mode is far lower than the expenditure cost of using formal editing. At the same time, it also saves management costs for employers, and there is no need to set up special personnel and institutions to manage outsourcing production lines.

3. Reduce personnel (labor) disputes

Under the guidance of China's relevant laws, regulations and policies, employers sign outsourcing contracts with outsourcing companies, and outsourcing companies sign labor contracts with outsourcing employees. Employers and outsourced employees have a paid use relationship, and there is no labor relationship. In this way, the employer avoids the personnel (labor) disputes with the outsourced employees, and the different opinions of the outsourced employees on the daily assessment can also be handled through the outsourcing company, saving the management energy of the employer.

4. Make the human resources department complete the strategic transformation.

After the implementation of production outsourcing, the functions of human resources department and production department have changed from the original complex transactional management functions to participating in enterprise strategy, organizing business activities, leading enterprise reform and establishing competitive advantages.