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Article | November 30, 1997
Materials and container development lead outsourced functions (sidebar)
Flexibility, enhancing core competences are major drivers to outsourcing
While there is still controversy about the effects of outsourcing on company operations most of Packaging World's survey respondents were positive. The two most often cited advantages of outsourcing were in creating more flexibility for plant operations and the opportunity to improve core competences.
The packaging engineer for a national maker of housewares says that outsourcing "frees up our workers to handle other projects." That's virtually the same response from the director of manufacturing at a Midwest chemical company. The vice president for operations at a West Coast producer of paints and varnishes points out: "Access to outside contractors and ideas provides us with a broader spectrum of input."
A senior engineer for a national maker of leisure products says that outsourcing allows more in-house development work. "Our internal resources can be used for process capability and development of new technology. Contractors can be hired to do the 'cookie-cutter' executions."
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Many responses emphasized that outsourcing allows in-house production to concentrate on its core competences. The marketing manager for an Eastern frozen foods manufacturer says that by outsourcing "we get more production out and it's less costly as well." The materials manager at a Midwest maker of insulated containers explains: "The tasks we outsource are those with small volumes and those that require equipment that we don't have. The volumes just don't justify purchasing these pieces of equipment."
"The use of outside contractors allows for special packs that are not compatible with our high-speed packaging lines" points out the marketing manager for a national food processor. A senior engineer for a maker of household products sees the same improvement in in-house efficiency. "By contracting out the small inefficient operations we avoid the need for more supervision more set-up times etcetera."
Time and quality are the benefits cited by the director of marketing for a maker of deli products: "We are meeting our time schedules more often [with outsourcing]. The quality of the work is much better too." A machinery designer for a household chemicals maker also cites speed. "Through outsourcing the designs are produced more quickly."
Finally one packaging engineer for a national apparel company presented a balanced opinion. "We see efficiencies because some of the workload is shifted out of the plant. But sometimes there can be inefficiencies too. Design times can be longer if there are any problems with communications" between the two companies.
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