Majority of Firms Suffer from Costly Incidents Due to Outsourcing Challenges

85 percent outsource, yet only 32 percent have an infrastructure for managing and communicating with their suppliers, according to survey


"With manufacturing dispersed around the globe, companies need a common infrastructure for sharing product information with their CMs to reduce hard-dollar incidents that can result from common outsourcing issues. Hard-dollar incidents can take their toll on manufacturers, especially those in the mid-market where margins are often tight and reducing time and costs is critical, and consume expected savings from outsourcing," said Michael Topolovac, CEO of Arena Solutions. "Underscoring the magnitude of the risk is the common belief that the cost of product changes increases ten-fold each time errors move into the next development cycle, from design through manufacturing. Having a PLM system — particularly one that is easy to use and deploy — that helps manufacturers reduce the incidents of late-stage changes is crucial."

More than 800 individuals, predominantly senior executives and subject matter experts from a wide variety of discrete manufacturing industries including high-tech electronics, medical devices, consumer products, aerospace and defense, automotive and industrial segments, responded to the survey. Over 70 percent of them work for companies that generate less than $250 million in annual revenues and operate with fewer than 1,000 employees. Participants included professionals from engineering (41 percent), manufacturing and procurement (36 percent), and other functional roles (23 percent).

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