Outsourcing is now a national trend among major original equipment manufacturers, something molders and mold makers need to anticipate if they expect to gain from this movement. Recent surveys show that corporate decentralization is largely responsible for taking certain functions away from the OEM.
One function that's getting attention in this arena is design. A recent survey conducted by Business Week magazine and the Industrial Designers Society of America shows that although design budgets are up, staffing is down. This is leading to a tremendous degree of outsourcing. In plastics, more mold makers are being asked to get on board the product-development train up front to take up OEMs' slack.
A recent Nation's Business readers' poll revealed that 58 percent of respondents outsource at least 10 percent of their firm's activities. It showed that 29 percent outsourced manufacturing, processing and assembling.
The biggest reason respondents cited was lack of in-house skills (58 percent). That was followed by ``gives managers more time to focus on products/services and business expansion'' (36 percent); ``re-duces administrative costs'' and ``lowers costs of providing prod-ucts or services'' (28 percent each); and ``reduces need for further capital investments'' (20 percent).
Twenty-seven percent are likely to outsource even more functions, and 73 percent are not ``considering bringing back in-house any function now outsourced.''
The implication of these surveys is phenomenal. OEMs are increasingly dependent on suppliers for product and mold design and parts that are finished, assembled, packaged and drop-shipped to the customers.
OEMs don't want to make the investment in technology to perform these functions, which means that you, the molder and mold maker, will have to spend big bucks to bring your shop up to the standards they need. OEMs look to you to provide good part designs from which to build tooling that will produce usable parts for products that get to market fast.
This new dependency is a big responsibility, and it doesn't come cheaply. But it's a price you will have to pay. Either that or you'll find yourself wondering why your shop is suddenly so quiet.
Goldsberry is a Plastics News correspondent based in Phoenix.