Design Outsourcing – What is Keeping You from Taking the Next Step?
Consider this: if every family still grew the food, hunted for meat and dug holes in the ground for water to keep them nourished, we would be living in the 1800’s (or earlier). We outsource on a daily basis. When was the last time you went out to eat? You just outsourced the farming, picking, preparing, cooking and cleaning of that meal. When was the last time you went grocery shopping? How many people outsource housekeeping? How about lawn maintenance? In large cities many people outsource their transportation. It is not a bad thing to outsource; it creates more time to do other things that help to make us more productive in our lives.
Every week, we are contacted by prospective new clientele. These inbound inquiries come in unsolicited. Some are testing the waters, some are researching to find out more information and some are ready to partner up. We welcome all requests for information. Outsourcing does not work for every truss/component manufacturing business, but knowing what options are available will help you to make the right decision for you and your company.
If I can help make the decision to consider outsourcing then I have done my job. My mission is not to “sign up” every truss company. My job is to educate and distribute information about an additional resource that is available that might be beneficial to you. In an effort to do that, I will first address some of the concerns about outsourcing.
- Loss of Managerial Control. When you send a job out it is in someone else’s hands to complete in a timely manner. They might not share the same urgency that you or your customers have in turn-around time.
- Quality Issues. Does the outsource company have the same pride and care for your customer standards and reputation? Are they just looking for the lowest labor expense for the greatest profit margin? What happens if they make an error and it is not realized until it reaches the field?
- Confidentiality and Security. What will the outsource company do with my pricing scheme? You do not want your direct competitor able to access your pricing. Is the information you share secure? What safeguards are there?
- Hidden Costs. Is there the possibility of having a job held “hostage” for a pricing issue? Are the costs clearly defined? Is there a discount for easier work?
- The Stigmata of the Word Outsourcing. The term outsourcing has a negative connotation to it. Many times it equates to the loss of local jobs, or jobs within the country of residence. It can also be inferred that the work can be done cheaper which would bring quality into question.
There are also several benefits to outsourcing:
- Streamlining Operations. It is possible to reduce the type of work being performed at the production location which would allow for more focus on production efficiency.
- Cost Savings. With a virtual staff there is no cost of overhead. You are not paying for a staff to sit idle and wait for work to come in. There is no cost of hiring and training employees.
- Staffing Issues. If you land a large project that would effectively shut down the design department, you would have to pass on any other work until it got done. A virtual staff could grow with your needs in real time.
- Open Bottlenecks. Are you producing at the maximum rate you can? Are you realizing your shop’s true potential? Could the shop build more but you can’t get it through design fast enough to keep up?
Gould Design, Inc. has considered all of these questions and more. We have learned as we have grown over the last decade. We have helped companies, both large and small, through hiring issues, software updates and conversions, large multi-family projects and more. We have even successfully taken on projects in different languages and measurement systems. We have tailored ourselves to combat the common pitfalls typical in the outsource market:
- Managerial Control. We have various ways to allow the customer to keep a level of control over the jobs that are submitted to GDI and the timetable required.
- Quality. We have developed the most comprehensive and thorough documentation available in the industry to accurately produce work in the same fashion as it is currently done in-house. The standards we create are a living document, able to be modified and “tweaked” as necessary.
- Confidentiality and Security. It goes without saying that there needs to be a level of trust when sharing customer specific information. We have a two-way confidentiality agreement with all of our customers that instill privacy and discretion for all parties concerned.
- Hidden Costs. There are no hidden costs at GDI. Our pricing scheme is clearly defined prior to engaging in any work so that the customer proactively knows what to expect. There are discounts based on complexity, volume of work, etc.
- Stigmata of Outsourcing. We have done our best to try to eliminate the stigmata. It is not a dirty word; it is becoming more commonplace in industries such as this one. We employ real truss designers all across North America. We do not farm out our work overseas to sub-par labor pools that might not have even seen a real truss.
The economic downturn in 2008 severely hurt the building industry. Many truss designers lost their jobs and had to find work in other fields. The industry is making its comeback, but a good majority of those designers are not. Construction starts are up every quarter. The biggest gripe we hear from the truss industry is that the salesmen have to turn down work because they cannot get it delivered when the customer needs it. The bottleneck seems to be in the design department. We regularly hear that the plant could be producing 20% – 40% more if there were trusses to put through the shop. How important is it to make that much more profit with your current staff and no additional overhead?
Consider the possibilities. Consider the options available to you. Consider outsourcing. At least spend a little time researching. We have plenty of information to share with you to help you decide if it is a viable route for you to explore.
Jim Turner – Director of Business Relations: North America
Gould Design, Inc.