Transfer of manufacturing capacities to low-cost areas is a conventional trend; however before you start to receive extra profit (due to lower Opex) you have to invest Capex to transfer process.

Outsourcing is another accepted-with-everyone trend – and emerging countries play more and more significant role there, and not only in IT outsourcing. But what’s about quality provided with outsourcer? What’s about technological reciprocation between the producer and its outsourcers? These and many other questions usually rise at transition to outsourcing – and most of them refer to technological area.

Case study

Challenge: Global automotive producer intending to launch a production site in on of the emerging markets met localization requirements in particular the necessity to use locally produced parts and components. Being the recognized leader in quality of its vehicles a client wanted to a) identify if there were part and component local suppliers with appropriate quality and b) analyze the future location for its new site from a point of view of part and component supply logistics.

Approach: Starting with technology compatibility research (client’s quality requirements vs. the national and industry standards) ICG continued with impartial analysis of quality provided with local suppliers; 14 companies were selected from 122 suppliers to be evaluated for conformity with client’s requirements.

Client’s planned location in the emerging market was analyzed and recommendations were provided towards improvement of logistic schemes for part and component supply. 

Value: Three suppliers were selected for immediate deliveries of their parts and components, and 7 firms received improvement recommendations and became suppliers later – with our control over how they followed recommendations.