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					Outsourcing the High-Tech Supply Chain
Dave Williams
Director Manufacturing, Microsoft, EMEA

Agenda

Background to Microsoft Supply Chain Outsourcing Considerations Benefits & Challenges of Outsourcing Key Leanings

Microsoft Supply Chain

The launch, manufacture and supply of physical Microsoft Products
Hardware, Software & combinations Retail, Commercial Customers, Consumers

Software Supply Chain
History
Initially all supply chain activity was in-house Developed to support a “distributor” supply model 1997/1998 transitioned to an outsourced model 2000 developed the direct to retail mode

Today
Outsource Model
Sourcing ( non strategic), Manufacture, Warehouse, Logistics, Customer Support & Reverse Logistics

Retail, Distributor & End User capabilities Scope of Supply Chain
Product Launch Consumer

Outsourcing Considerations

Benefits of outsourcing
Efficient use of Internal Resources Access to Technology Leverage Assets & People Agility Geographic Footprint
• You focus on new business • Vendor focus on sustain

• New products/process may require skills not in house

• Avoid investment in capital equipment, plant & IT overhead • Leverage skills across business or short term projects

• Flexibility in with changing product requirements • Flex resources across businesses with seasonal activity

• Use of a multi-site vendor – produce locally • Ability to move with changing business condition

Challenges of outsourcing
Aligning Business Objectives
• Objective of customer & vendor may pull in different directions • Requires strong communications to make this work

Vendor Focus on YOUR business Loosing depth of knowledge in your organisation

• Competing for time and resources at vendor site • Is the vendor thinking strategically about your business

• Over time you may loose operational depth of knowledge • Challenges of hiring the correct skills

Five key learning's
IT Infrastructure
• The “central nervous system” of the supply chain • Timely information will drive effective decisions

Measure to Manage

• Measure the correct signals • Rate the subjective elements of performance

Vendor Management Skills

• Outsource vs Internal may require different skills • Build Strong relationships across levels of the organisations

Vendor Organisation

• The people are the most important asset of the outsource provider • Hire them as you would hire your own resources

Outsource a “good” process

• Outsourcing a bad process will not make it go away • Fix it first, prove it works, then outsource • Keep the process simple

Questions?


				
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posted:7/31/2009
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