@syedzunair - I agree. I don't think I expressed my thought very well in previous post, but was trying to say that it may be far more economical to purchase rather than make a material or component when there is a broad base over which your supplier of that material or component can spread their fixed expenses.
Raw material cost is one of the key variables for production and if you can decrease the cost of raw materials you can make the product in lesser cost. However, I believe that the decision to outsource should not only be made on the basis of cost of raw material. There are some other factors involved like production facilities, infrastructure, compliance etc. If the site that you want to outsource to meets these criteria then outsourcing might be a good option.
@ Bolaji, I like your analogy of many webs and many spiders. I got bit by one of the poisonous spiders last week. My entire website was hijacked and all the links took visitors to bogus sites. I cleaned up the redirecting files and a day later was bit again. So, I hired a security service who is now watching my site 24/7. I also upped my registration requirements to ferret out the spider spam bots. Anywhere the supply chain has an open link, is a potential for a incursion, diversion, and subversion. Anyway, thst's my version of this issue.
I agree about the web analogy although at times I believe this web is so broken in places that flies are just zipping in and out at will.
As you are aware this has been the case for quite a while and it will continue to be so in the near future because the web isn't built for one "spider," it's not a single web either and there are just way too many spiders with conflicting interests. The web isn't working for the benefit of all but often its limitations impact all.
@Barbara, the web anology is apt. The chain link fence or river delta system with parallel and intersecting paths, seems like the picture for multi sourcing and contingency planning that would aid in risk mitigation and consequently a higher level of confidence that the supply will be there when you need it.
I keep envisioning the supply chain as a web--it has its circular aspect as well as the tributaries you mention. Either way, I agree that vertical integration has a significant comnpetitive advnatage and in some cases outsourcing has run amok. Looking forward to further discussion.
I believe companies looking and targeting sustainable growth and long term stabling will always assess their current organizational practices across different functions and identify the areas of simplification. Mini suppy chains with in the company are one of the major things which is reviewed constantly and looking for reducing the time and efforts.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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