What Makes Companies go from Outsourcing to Insourcing? The Need for Innovation!

Was Outsourcing a Mistake, or Just a Blip?
The December 12 Atlantic Monthly has a couple of great articles on the rise of insourcing. In The Insourcing Boom, author Charles Fishman makes a pretty stunning assertion:

What is only now dawning on the smart American companies, says Lenzi, is that when you outsource the making of the products, “your whole business goes with the outsourcing.” Which raises a troubling but also thrilling prospect: the offshoring rush of the past decade or more—one of the signature economic events of our times—may have been a mistake.

People Working Together IN THE SAME PHYSICAL LOCATION to Innovate a New Product

The gist of Fishman's article is that markets move too quickly now for manufacturers to outsource production. To evolve a product at the speed consumers expect, companies need to draw on the skills of all the people involved in the production process--from engineers to line workers to sales people.

And as great as web collaboration software is, as helpful as Skype calls can be, companies are seeing the most benefit by putting people together physically--not virtualy--to reeeningeer old processes and innovate new products.

Fishman has some great examples of how this works in the real world. He tells one story of how a team of GE employees in the U.S. got together and reimagined how to build a dishwasher. When they were finished, they had eliminated 35 percent of the labor required to build one.

Less, but Smarter, Use of Labor
That's pretty amazing. But what is even more stunning is what they did with that extra 35 percent. GE management asked the team to pick a dishwasher part they thought they could build better here in the U.S. They chose a part, reinvented and improved it, and then went on to try to improve other parts.

And that, Fishman says, is how "the outsourcing cycle starts to turn. Once you begin making the product itself, you get the itch to make the parts, too."

How cool is that: The turn of the cycle from outsourcing to insourcing. This change points to the importance of innovation, of real-time collaboration across teams. I can't help but imagine one of these teams in a room, with MINDMAP up on the wall, brainstorming how to "build a better mousetrap."

Can Your Company Do Better Through Cross-Team Collaboration?
This global turn of events is pretty exciting for companies like CS Odessa, which has always believed in the power of creative people working together to solve business challenges.

So what about you? Does your company outsource? What would happen if you started manufacturing your products right here in the U.S... if you put your U.S. workers together to help them innovate the next product. You would be in some very good company if you gave it a try!

Note: Fishman's article provides a number of other very tangible reasons why the insourcing trend is gaining strength here in the U.S.

Visit www.conceptdraw.com to see how our products can help your teams innovate.

Create Strategic Marketing Plans 80% Faster

Jack Todaro manages business development, sales, and marketing for Oregon Aero, an aerospace company that designs and manufactures products primarily for aviation, law enforcement, and the military.

Todaro says that the success of a small company like his depends on fast, strategic thinking to succeed. He, in turn, depends on ConceptDraw MINDMAP to help him make sense of all the different data points that contribute to his strategic thinking.

Hobie: What kind of strategic thinking are you involved in?
Todaro: My job has a lot of different dimensions. I have to help conceptualize what products we want to develop, analyze what the marketplace is, help engineering develop the product, and then develop the strategies that will help us bring the right product to market and find the right buyers.

Hobie: What are some of the elements of these strategies?
Todaro: They include identifying how we’re going to approach the market—whether it's through trade shows, magazine ads, or direct mail, e-mail campaigns, sales calls, et cetera. I manage how the marketing program is put into effect, and I make sure that we capture and follow up on all of the leads we generate through marketing.

Hobie: You recently worked on a project to develop cushions for helicopters. What was that all about?
Todaro: All helicopters come with standard seats. But a U.S. government agency wanted cushions that would help pilots avoid the physical problems that come from sitting too long in one position.

Whenever we consider creating a new product, we have to think about how large the market will be. I used MINDMAP to assess our opportunities in law enforcement, medical evacuation, and the military. I started by looking at the U.S. market, where I learned that about 200 helicopters were being used by domestic law enforcement. So that’s the first market that we're going to go after.

But I also discovered that there were almost 4,000 of these helicopters throughout the world. So my next step was to map out who owns all of these helicopters, how they’re being used, and the best strategy to sell to these owners.

Hobie: How else do you use MINDMAP?
Todaro: I use it for all kinds of things. We just finished a show in Florida called Heli-Expo. All the major OEMs and customers attend it, so we wanted to have a big presence. I used MINDMAP to design a 20-foot booth, including seating and tables. Then I gave the mind map to the company that would create the booth, and we went back and forth until we landed on the right design.

Hobie: So you use mind mapping for a wide variety of projects. What's the common thread?
Todaro: If I had to choose the top two things I get from mind mapping, I’d say that it’s speed and quality. Mind mapping shortens my thinking time by about 80 percent—and that’s a huge benefit.

It also helps me get new ideas much faster. If I'm presented with a blank sheet of paper, I’ll just sit there thinking and thinking. But with MINDMAP, the ideas just flow. I can see how they all fit together—and that helps me sharpen my thinking. Mind mapping is just an extremely intuitive and fast way to work.

Find out how ConceptDraw MINDMAP can speed up your thinking and planning!