The Contents of a Product Outsourcing Scorecard

There is a great risk whenever companies outsource part of their business, especially if they outsource the actual production or manufacturing. However, there has to be a clear understanding of the outsourcing business before we can discuss the Product Outsourcing Scorecard.Outsourcing is a business approach that many global corporations practice to cut on costs. What happens is that a company passes over a significant bulk of their work to another company. The recipient of the department is called a Business Process Outsourcing (BPO) company. What the BPO company does is to complete the client’s processes on their behalf and they get paid for their services. In essence, a BPO company is like a ghost company.For example, Brand X outsourced its manufacturing department to BPO Company A. BPO Company A will build a factory to manufacture the products and then stamp it as Brand X. People who will buy Brand X will think that it was really Brand X that manufactured the goods.This strategy is actually good for many global organizations that want to focus on research instead of manufacturing the actual goods. In essence, this is a great way of managing resources since the company only needs to focus its energy in business strategies instead of doing the actual legwork. This is also a good strategy, especially if the tasks being outsourced are the specialty of the BPO company because this reduces the possibility of error.In any scorecard, it should be noted that delivery of the service or product on time is a necessity. The risk mentioned earlier is if the BPO company cannot deliver the product right on time. Several companies have wasted a lot of money on outsourced production because the BPO company that contracted the manufacturing did not deliver the product on time. This is especially so if the bulk of the task is unplanned and the BPO industry is not prepared.Another metric that should be incorporated in the scorecard of BPO companies is quality. Clients should be very specific in the quality of the products or services that the BPO company produces. This is another risk since the BPO company will produce the products that the client will sell as theirs. Any substandard output will result to a decline in customer satisfaction and these customers will relate poor quality with the brand name, not the actual manufacturer. It should be noted that there has to be random quality check or monitoring to ensure that what the BPO company does is correct. Accordingly, there should be an adequate sampling plan that will represent the product population quality.There are many companies now that offer process outsourcing, especially in the support areas of businesses like hiring, customer service, technical service, and dispatch, etc. Many companies also specialize in manufacturing and any business manager thinking of outsourcing the actual production of the goods should be prepared to have a product outsourcing scorecard that will serve as a guide for the process outsourcer. This will be the basis of performance and repeat business in the future.