Outsourcing is a sign of trust

Outsourcing to a particular subcontractor is always based on trust and credibility. If the supplier has a strong track record of successful outsourcing, it will make it considerably easier to choose a supplier. The client relies heavily on the supplier’s ability to complete the outsourcing project successfully.

Trust is built through actions and measured by results. Indeed, outsourcing operations rarely occurs with previously unknown partners. Typically, outsourcing is a long process: the client and the subcontractor have known each other for a long time and the collaboration has a strong background.

The benefits of outsourcing visible in financial performance

Many companies focus on specific areas of production, and then outsource activities that are less important strategically. For example, a client may consider outsourcing their sheet metal processing.  When outsourcing operations, the company does not have to invest in new machines or recruit new staff. Companies might also face a profitability challenge when they are not operating to full capacity. When outsourcing, a company could instead focus on product development and clients, for example.

Outsourcing nearby is worth it

To a great extent, the success of outsourcing depends on the business culture and -environment of the partner companies. For example, outsourcing to China often results in challenges caused by different time zones and cultural differences. Long freight times also slow down the client’s and the supplier’s response time, and costs can go up even if the calculations do not show it.

Project management is very important in outsourcing projects. It is essential to develop a workable plan for the outsourcing project that takes into consideration all the required areas, and to allocate sufficient resources for the work on both sides. A successful outsourcing process always requires open communication and good mutual trust. For example, our weekly meetings with the clients pay an important role in building trust and the success of the project. 

Choose an experienced partner for your outsourcing project

The cost of outsourcing matters, of course. The total price must be competitive, and the chosen partner must be able to carry out the project as agreed. Thanks to outsourcing, the client can focus on their core business, and an experienced partner – such as Meconet – will provide the equipment, expertise and know-how for the desired area.

In other words, outsourcing should not just be about direct cost savings. The most important thing is that the subcontractor is able to manufacture quality products and deliver them reliably. Outsourcing also results in an immediate improvement in a company’s cash flow. In addition, many outsourcing benefits appear later, for example through abandoning investments.

Jukka Mäkeläinen, Meconet Oy