There have always been shortcuts to achieving goals. These are what we call “the Hockey Stick Syndrome” movements, job cuts in order to achieve quick savings in short term and outsourcing attempts that are made urgently or without calculation.
Nowadays, the biggest goal pressure among all senior staff is on productivity and naturally the amount of employees; meaning employee fees. Under these circumstances, instead of putting out a lengthy innovation movement for these goals and reaching them by developing projects, executives can sometimes look for a quick and effective solution in order to achieve their goals.
Last year, when Siemens appointed their CFO Joe Kaeser as CEO, the first thing Kaeser did was to announce that 15.000 employees would be released.
The following article summarizes what happens when you appoint a CFO as CEO with a little sharp-tongued language;
Another way of renouncing employees is now seen as outsourcing. While this is actually a process that should be handled very fastidiously especially in manufacturing business, it can be preferred as one of the best ways to decrease head count and the cost increases brought by high general administrative expenses. What then?
For this, Boeing’s successive battery problems in Dreamliner, the crack in the cockpit window during the lift-off and the landing, brake issues, malfunction in computer systems, fuel leakage, generator malfunctions and the delays, penalties and reputation losses in relation to outsourcing should be reminded.
Likewise, the starting point of large-scale recall matters that had to be faced by Toyota, an automotive giant, is actually similar.
Besides, when each of these companies have an army of engineers and especially when Toyota proved their experience in working and transacting business cross-cultural, what can be said about the sufficiency of other small time companies if there are such major flaws in quality and if such malfunctions cannot be prevented?
Of course when many companies choose the path of outsourcing, they are contented with simple calculations, they decide and apply by comparing wage costs and transport expenses. Though afterwards, what is confronted with and is not taken into consideration is maybe much more than what was calculated: Quality costs, production losses, reputation losses and more.
And when we are counting these, we are not counting that with the production going out of the factory, a know-how worth the criticality of the piece also goes out and not counting the to-be-abandoned feedback that will come from the daily flow of abandoned production and the renouncement of the development and process engineering improvements it will create. We also know that there are companies who employ the same amount of personnel despite outsourcing some of their production or activities in other words, companies who put up with their problems, yet cannot see the benefit of this.
Without a doubt, all of what we have mentioned are problems that are faced by companies who are believed to apply this process relatively fine. It should also be mentioned that in companies with smaller purchasing and sanction power, subcontractors can be subcontracted again during uncontrollable periods, unqualified personnel can be employed and the process can become even more complicated than it was before.
In short, after working on it fastidiously and planning all the steps ahead, outsourcing processes are processes that can benefit the company only with manufacturers that are believed to be able to constitute a partnership that is actually good and only by providing great support for these manufacturers on every subject (primarily with the subjects of quality) and getting the manufacturers under complete control.
The business that think they will achieve savings in the number of employees through a shortcut by transferring some of the work to contract manufacturers will face even bigger problems brought by the taking of these easy way outs in the medium and the short term.