Needs & Strategy

From Costs to Costs-Plus-Quality

The goal of OUTSOURCING Inc. is simple: We aim to become the service provider of choice by providing clients with business solutions optimized to meet their ever-evolving needs.

From reducing costs to lower costs-plus-higher quality

Following the collapse of the bubble economy, the vast majority of Japanese manufacturers have striven to reduce costs and raise productivity. To accomplish these objectives, many companies have turned to production outsourcing and contracting of services to pare labor costs and enhance payroll flexibility—achieving considerable success in the process. Outsourcing service providers were able to meet client needs merely by recruiting the necessary manpower and placing them.

The operating environment in which manufacturers find themselves today, however, has changed dramatically. The diversification in consumer preferences and lifestyles has led to a proliferation of products and a higher frequency of model upgrades, resulting in shorter product lifetimes than ever. This has led to the emergence of a new trend as makers transitioned towards concentrating business resources on the development of new products while outsourcing production processes to dependable service providers. This shift, known as "core competence management," has led to tectonic changes in client demand, forcing providers to come up with new solutions. Not only must providers now meet the need to lower personnel costs of clients, they must also deliver improved manufacturing quality and enforce cost reduction measures across the entire production process—all this in addition to ensuring full compliance with the latest laws and labor regulations.

In short, then, client demand has undergone a major transformation—from focusing on reducing costs to the need for service providers to offer lower costs and higher quality services.

Demanding quality: The changing needs of clients