Outsourcing to increase among US based OEMs: D2P Manufacturing trends survey

About 42% of US based OEM (Original Equipment Manufacturer) plans for more outsourcing projects next year, according to latest survey report by Design-2-Part (D2P).  D2P is America’s largest consultancy provider who brings together OEMs and contract manufacturers. D2P helps the OEMs to find contract manufacturers who wish to outsource part of their manufacturing process.

The consultancy firm recently commissioned a survey among the OEM companies in US to learn about the latest manufacturing trends. The survey was conducted among 10,000 manufacturing engineers and purchasing personnel of America’s major manufacturing companies. The consultancy succeeded to get 436 responses from across all the manufacturing industry in US. The survey reveals latest manufacturing trends across US during September 2011 to June 2012.

manufacturing. Image source 9xmedia

As per the third annual D2P Manufacturing trends survey, 2012, there will be an increase of outsourcing manufacturing process by OEMs based in US. There is a 3% increase in the figures when compared to last year and 11% increase from 2010 survey report. As per the report, 42% of the respondents plan to have more outsourcing projects from contract manufacturers next year.

The survey report revealed that the business growth for manufacturing industry in US was not positive. Only 48% of OEMs reported a growth in business when compared to 51% in 2011.

Key highlights from the survey report:

  1. According to 47.5% of respondents, business had grown in the past 12 months. For 33.3% the business remained same and for 19.3% business declined.
  2. 48.7% of respondents said that quality remains the most important factor for measuring the services of manufacturing outsourcing vendors. 38.7% said product cost as a factor to measure vendor service, while 9.2% responded that delivery is the criteria to measure their vendors. 3.4% had the opinion that technology support is the main criteria to measure outsourcing vendors.
  3. According to 42% of the respondents, they intend to outsource manufacturing process to local vendors, 20% intend to outsource to national vendors and 19% opt to outsource to international vendors.
  4. According to 55.7% of the respondents, the primary reason to outsource to local vendors is hands-on access, for 20.8% its delivery time, for 12.8% it’s the local economy support and for 10.7% the reason is cost.
  5. 50% of the respondents viewed delivery time as the biggest risk in outsourcing to international vendors.  31% of the respondents viewed weak vendor stability as the risk in outsourcing to international vendors. While 11.9% respondents viewed increasing shipping cost as risk, 7.1% viewed natural disaster as the risk in outsourcing to overseas vendors.

The report also points out that superior quality, better communication and supervision, reliable delivery and short production runs are the advantages that manufacturing companies gain by outsourcing part of their manufacturing function.

You can view more details of the report by following the link.

Latest Columns

A right way to motivate an employee is to win his heart

The toughest job for an HR manager today in the BPO industry is managing the employees well and retaining them. Companies tend to follow many tactics for employee retention but this often ends in failure when not implemented well. BPOs and other companies should be keen on adopting newer ways to motivate an employee to […]

Pitfalls in working with larger BPO firms

December 20, 2011: When it comes to off shoring or outsourcing business functions, firms often look out for top Business Process Outsourcing (BPO) companies in India or any other location as listed by agencies like Gartner or NASSCOM. Outsourcing to a top player seems to be a safe idea to the firm, but certain studies […]

Speak Your Mind