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Outsourcing to Increase Profit…Good for Your Business?

02/25/2011

Excellent article in the LA Times today about Boeing outsourcing tasks for the new 787 Dreamliner.

The hard and costly lessons to be learned; lessons that transcend the product line.

http://lat.ms/e3MHu2

A couple of key takeaways –

– Excessive outsourcing actually raises costs and steers profits to the subcontractor.
– Subcontractors work nearly risk free, as costs and problems mount, it’s Boeing’s responsibility.
– Senior Management didn’t recognize that sending so much work abroad would demand more intensive management from the home plant…not less.

The Hart Smith reference paper is a must read, should be mandatory reading for every Business Major –

http://bit.ly/eeRzDD

Boeing 787 Dreamliner via WikiMedia Commons

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