A lively discussion currently taking place on Logipi.com centers around the issue of outsourcing. As a continuation of our discussions on the issues of outsourcing and the recession, I would like to include Dan Gilmore's post from Supply Chain Digest where he recently wrote about supply chain core versus context. He discusses how the economic recession helped to spur increased interest by companies to outsource in order to move towards variable cost structures.
However, the traditional framework for insource versus outsource analysis does
not take into consideration continuous innovation. Dan points out a
newer model by Geoffrey Moore. In this outsourcing model corporate
resources must be focused on innovation and non "core" activities should
be outsourced. "Core" activities are parts of the company's operations
that create differentiation that ultimately influence customer
purchases.
Will outsourcing non "core" supply chain activities help companies innovate? Is there more to innovation that just the issue of outsourcing? Does it also depend on how the outsourcing is done and how you define 'outsourcing'?
1. David Schneider says "you can innovate with the tools you have or take those same activities and hand them off to a 3PL, and let them do the innovating."
