If you are like me, you are elated to hear the introduction song to Monday night football; look forward to ESPN’s College Game Day and get a little upset when the Fantasy Football app doesn’t work. As hard as I work during the course of the week, I look forward to pulling for my favorite teams during the weekend and recharging for the next week’s challenges.
I live in the South so this is also the time of the year that I need to repair my lawn from the harsh heat of the summer and do all the things that will ensure a green lush lawn come Spring. The problem is I’d rather turn my attention to football. I’m certainly more productive on Mondays if I’ve had a relaxing weekend. Last year I made a decision that ensures I could watch football without the pressure of yard work calling my name. I outsourced the care of my lawn.
Sure I can fertilize, put down pre-emergent, aerate, seed, etc. myself. Performing these tasks are not of particular interest, not something I enjoy, nor do I regard it as a good use of my time. The service on the other hand takes pride in their abilities, invests in the right materials and equipment, and will gladly perform the service for not much more than it used to cost me in materials and equipment. And honestly the yard looks better. By outsourcing, I met both of my objectives – a beautiful lawn and a recharged mind and body.
Every executive overseeing distribution and manufacturing operations has similar sentiments towards some area of their business; it’s important but they’d rather focus on other things; it’s generally painful to deal with, and someone else would probably do it better.
The concept of outsourcing a task, a work cell or even an entire operation is certainly nothing new. However, the landscape of outsourcing options has changed dramatically during the last decade. Most notably, insourcing has become a popular and effective way to meet corporate objectives by delivering record-breaking results and eliminating headaches while maintaining control on-site.
What is insourcing? Insourcing is when a third party manages a process inside a company’s facility, often alongside other processes that the company continues to manage. Traditional outsourcing is when a third party manages a process outside the company’s facility which is typically wholly managed by the third party (see comparison chart below).
Executives may choose to go the insourcing route because they’re concerned about loss of control and protecting the customer experience. There could also be issues with utilization of assets like real estate or equipment that the company is committed to use. Or the process they’d like to outsource may be a part of a series that it needs to remain close to. Whatever the case; they need it to stay in-house.
Conversely, the traditional outsource model means that the operation takes place in a separate facility with their own management, transportation and labor resources. Often the outsourced operation is not in even in the same city as the company.
Insourcing as a business model does provide many of the same benefits as traditional outsourcing while remaining at the company’s site. There’s a contractual agreement to a specific cost per unit, or a cost-plus model and the insourcing company is responsible for meeting all production targets. However, not all insource companies offer the same services, benefits and areas of expertise. nGROUP Performance Partners is a unique example of a company, with both a consulting and an insourcing services, that provides experts in engineered standards and efficiency, labor management with black and green belt certification in Lean Six Sigma, and employee engagement. Not only does nGROUP pay for themselves, they bring expertise to the table that saves companies money by increasing efficiency.
For example, as an insourcing partner, nGROUP was able to achieve a 30% cost savings for Sony Electronics Distribution Center in Carson, CA during a corporate initiative to significantly reduce costs.
By Ryan Cates, Vice President nGROUP
nGROUP has been making the grass greener for labor intensive industries for 15 years. Their award winning nGROUP Performance System (NPS) consistently outperforms other methods, increasing productivity, quality, and morale by reducing labor costs by a minimum of 10-25%. For more information on insourcing with nGROUP, please contact Diron Raines EVP at draines@nGROUP.biz, or Ryan Cates VP at rcates@nGROUP.biz.