How to Effortlessly Manage your Engineering Services Supply Base by Reducing Efforts and Cost?

Stay Competitive – Improve Your Profitability

If you are a large engineering or a manufacturing company or an OEM, and if you are increasingly outsourcing your engineering activities, managing the costs associated with your supply base is critical to stay competitive and improve your profits. Following are couple of ways to do so:

1. Reduce the overall cost of your suppliers’ services
2. Reduce the amount of effort and time your company spends in working with your suppliers

So how can you reduce the overall cost of your suppliers’ services or the work package?

A significant strategy to increase your profits is to reduce the overall cost of a work package outsourced to an engineering services provider, or subsequently keep existing costs low. Five significant actions can accomplish the strategy of reducing the cost of an engineering services work package.

• Provide growth opportunity to the supplier
• Dissect the work package
• Define the project start point and inputs
• Avoid regulatory and legal fines
• Neutralize supplier power

A second strategy to increase the profits of a customer’s organization is to reduce the overall effort the customer must expend to outsource engineering tasks and related deliverables. By doing this, the customer will gain more energy and focus to work on tasks that may have a larger impact to the top line of the organization. These activities should focus on the customers’ Intellectual Property and core activities that will differentiate them from their competition. So what are some of the more impactful items customers can do to reduce their efforts associated with engineering services?

• Create Work Packages for Repeatable Work
• State the Project Exit Criteria
• Avoid Statements of Work that demand Considerable Familiarization

If you are further interested to read our e-book on this or get in touch with one of our experts to understand how QuEST Global can help you get your cost down, please send an email to [email protected].

Post by Jason Fayer,
Engineering Manager for Emerging Programs