May 14, 2019 - Deepika Padukone invests in maker of Epigamia yogurt

From the Editor's Desk

To Outsource, or Not to Outsource?

Fact or fiction? Third-party manufacturing services can make supply chains more efficient. The answer varies from company to company and product to product, but many leadership teams will never know because they assume outsourcing is more expensive and overlook its strategic potential. Most companies use third-party manufacturers only to solve short-term capacity constraints.

That’s a missed opportunity. Best-in-class manufacturers are discovering that a thoughtful approach to outsourcing can help increase their competitive edge. In fact, buying a product instead of making it may prove more efficient once leadership teams add up all the costs of in-house production, many of which are hidden. One example is the added organizational complexity that comes with building and managing production lines as part of a broader network. Leaders also know that outsourcing can improve quality and reduce time to market. To get to the correct answer for each product, executive teams need to analyze all of these factors.

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