Outsourcing Central: IQMS enterprise module schedules SC movement; monitors work status

The practice of outsourcing certain aspects of production is proving vital in certain industries. In fact, data out of Boston-based AMR Research suggests a confluence of economic, technology, and political factors that, when combined, will drive growth of logistics and greater supply chain outsourcing.
By Jim Fulcher, contributing editor (jimfulcher@comcast.net) June 1, 2008

The practice of outsourcing certain aspects of production is proving vital in certain industries. In fact, data out of Boston-based AMR Research suggests a confluence of economic, technology, and political factors that, when combined, will drive growth of logistics and greater supply chain outsourcing.

Those factors include a decade of staff downsizing, the globalization of supply chains, a reliance on increasingly complex operations in demand-driven networks, and the availability of many more offshore, low-cost, back-office outsourcing suppliers. All contribute to the awareness and acceptance of outsourcing.

Yet in practice, supply chain outsourcing is not without its challenges. Monitoring shipments to a partner, obtaining information from partners regarding work status, and monitoring status of a return shipment is a complex process.

Vancouver, Wash.-based KASO Plastics uses Outsource Central, a module within the EnterpriseIQ enterprise solution from IQMS . The module allows users to track the status of products produced—either partially or completely—at outsourced vendor locations, and also supports globalization by moving inventory and product to and from multiple supplier locations.

“We do quite a bit of outsourcing for processes such as painting, coating, and stamping. Since Outsource Central was an add-on to EnterpriseIQ, it was very appealing because it didn’t require extra integration,” says Mark Copeland, materials manager at KASO, a full-service custom injection molder of plastics. “What it does is automate outsourcing management so it no longer requires manual data entry.”

For instance, Outsource Central enables KASO employees to assign work to an outside party as if it was an internal work center. Consequently, KASO is able to schedule shipping to the partner, track work done by that partner, and schedule when the completed order will come back to KASO, Copeland says.

Custom molder NMC Group, a specialist in small and medium-size parts, is familiarizing itself with the IQMS Outsource Central module in anticipation of higher transaction volumes.

“Using the module, we’re better able to calculate shipping schedules to the supplier. But we also know what inventory is at an outsourced vendor’s facility, along with how many parts are being completed per day, so we can schedule all that into our lead time,” Copeland says. “Access to that knowledge [allows us to generate] more accurate customer delivery dates.”

Other companies may not do much outsourcing yet, but do anticipate the need for additional outsourcing in the foreseeable future. Some of these companies are using Outsource Central to put processes in place and gain experience so they are better prepared to handle expected growth.

“We outsource etching, chemical processing, and some simple assembly, but we only have a few outsourcing transactions per month,” says Tom Mendez, controller and HR manager at Pomona, Calif.-based NMC Group , a custom molder specializing in small and medium-size parts. “We see a clear need for additional outsourcing as we continue to grow. Our philosophy is we don’t want to wait until we’re overwhelmed to begin automating a business process. With that in mind, this is a good opportunity to become familiar with Outsource Central because our transaction volume isn’t too high just yet.”n