of 3 - Center for Global Outsourcings

prescription to grow not only organically but by getting the IBM PC Division's
manufacturing offloaded.
Case Example �Fairchild Semiconductor
Long time ago when Fairchild Semiconductor was looking for cheaper resources, they
new they had to go to the East. They set the history of Outsourcing by getting the labor
intensive visual inspection done in Singapore. The center point of this initiative was Cost
Reduction. The initiative was huge and could not have been accomplished without the
executive leadership and vision of the lead team. The improved competitiveness of
Fairchild kept them in business forever which without such leaders many companies went
out of existance.
Case Example �Alcoa Electronic Packaging
I too faced the same problem when I was CIO of Alcoa Electronic Packaging. Here my
optimization of cost studies found that no matter how much efficiency of our operations
was improved we would not be able to compete against Kyocera. The solution if the
company wanted to stay in business was to outsource the final visual inspection of our
multi layered cofired ceramic packages. This would make us competitive with Kyocera.
Case Example �Apple
Apple probably is the best example of Executive Leadership and Vision It does not
manufacture anything in the developed world. All is done at the Foxconn factories in
China. Is Apple competitive? Who is responsible for Apple's whole sale outsourcing of
their manufacturing. It has got to be the leadership and vision of Tim Cook who now is
CEO but who in his early career at Apple championed their Supply Chain Management &
outsourcing of manufacturing. These facts are well know but what I want to emphasize is
that their Supply Chain costs are the lowest and they reflect that in their pricing. Is Apple's
competitiveness due to pricing. Probably not because they are the high end dealer of
items that consumers adore. Their competitiveness comes as much from outsourcing as
much it I driven by their Sr Management's leadership and vision. Prior to Cook's time they
manufactured all in their Cupertino factories but not since he championed and optimized
their Supply Chains by outsourcing. When Steve Jobs 2 was asked by Obama, when will
you bring your manufacturing back to USA. His simple answer was never. Without giving
further details let me only say that if it were to be the case Apple's operating income will
not be what it is.
Conclusions
Through the above discussions and case examples I hope that it is established that
leadership, vision and in most cases outsourcing are the foundations of enterprises'
competitiveness. This paper has also discussed how executive leadership can become
the foundation for the rigorous development of vision that is used to develop the
strategies and planning for execution to create additional business value and hence
competitiveness.
References
1. Sam Bansal- Technology Scor Cards- Aligning Investments with Business
Performance, Wiley April 2009.
2. Kasper- Apple's overseas manufacturing operations offer flexibility, not just
savings,Apple Insider- Jan 2012.
Tenth Annual International Daejeon, South Korea P a g e | 29
Smart Sourcing Conference June 28-29, 2012