For the full survey results, visit www.e2open.com/outsourcedmfg

© 2016 E2open

80%64%58%40%

In-Stock Positions

Purchase Orders

In-Transit Inventory

Upside Availability

When it comes to supply chain visibility, access to data regarding in-stock positions, purchase orders and in-transit inventory are among the top processes for supplier visibility.

Visibility into upside availability presents brand owners with an opportunity to drive increased revenue through collaboration and creates a win-win scenario.

of respondents report that operating margins have grown and new product introductions have been successfully executed as a result of their decision to offload activities to reliable partners.

44%

In spite of leveraging outsourced manufacturing, the majority of respondents are not realizing its full benefits when viewed through the lens of inventory management.

Only 27% of respondents report a reduction in inventory for outsourced products, whereas 73% of respondents say their inventory is either higher or has shown no change at all. One way to address these inventory liability challenges is with better responsiveness, collaboration and visibility.

No

Cha

nge

- 34%

Lower - 27%

Higher - 39%

60%

OEM HasVisibility

Unsure

No Visibility

17%

23%

In most instances (60%) the brand owner/OEM has clear visibility into the contract manufacturer’s component inventory.

Yet, as previously cited, visibility is lacking for one out of four (23%) of companies, while 17% of companies are “unsure” of the brand owner/OEM’s visibility.

25% 43% 32%

20% 32% 48%

32% 34% 34%

35% 29% 36%

LEV

EL

OF

VIS

IBIL

ITY

INTO SUPPLIERS WHO ARE

Tier 1 - Contract Manufacturer

Tier 2 - e.g., System/Component Supplier

Tier 3 - e.g., Part(s) Supplier

Tier 4 - e.g., Raw Materials

Visibility with Tier 2, Tier 3 and Tier 4 suppliers is also falling short – 2 out of 3 surveyed assert that their visibility into these tiers of the supply chain is, at best, moderate to low. Clearly, there’s an opportunity and a desire for improvement in visibility.

LOW HIGH

33%

46%

21%

58%52%

30%

LongerLifecycleProducts

NewProducts

ShortLifecycleProducts

With the promise of cost reduction, skilled labor, and third-party expertise, outsourced manufacturing is a reality for many companies. Even with the increase in onshoring and nearshoring strategies, outsourced manufacturing is a core function that many companies will continue to pursue. However, what’s different is how companies work together to achieve sustainable results and leverage capabilities, such as end-to-end visibility, flexibility and responsiveness.

This survey highlights the results of polls with executives regarding their use of outsourced manufacturing and their level of visibility and collaboration.

Companies are most likely to use outsourced manufacturing either with newly-developed products or those that have long production cycles.

WHEN MANUFACTURING IS OUTSOURCED

One out of three firms predicts an increase in the level of outsourced manufacturing services that they utilize.

Increased Outsourcing

No Change

Decreased Outsourcing

For companies of all sizes, and across all industries, outsourced manufacturing works best when brand owners have end-to-end visibility and the ability to collaborate on forecasts, orders, and inventory with partners in the entire supply chain.

20/2020/2020/20 VISION

O U T S O U R C E D

MANUFACTURINGfor

Highlights from the Survey