VCM-PUNVA-2ND SEM

FREDERIKKE LOUISE RISGAARD

VALENTINA T. DUMITRACHE

ASBJØRN GULDBORG

NERESHRATNAM RAMACHANDRAN MOORTHY

Agenda

Outsourcing to Flextronics (Outsourcing matrix +matrixes explained)

Outsourcing Process key elements

organizational level decision making

Resistance during process

Competences B&O need for new contracts major changes

Benefits for B&O and Flextronics pro’s and con’s

Current status

B&O

Flextronics

Factory in Skive

Outsourcing to Flextronics BY USING FLEXTRONICS B&O ARE SURE TO GET THE QUALITY THEY WANT.

A GOOD CORPORATION WHERE THEY GET THE IDEAS (INNOVATION) AND FLEXTRONICS HELPS THEM PRODUCING THE NECESSARY PARTS.

B&O IS IN-HOUSE/INVEST.

USAGE OF FLEXTRONICS KNOWLEDGE TO THEIR OWN BENEFIT.

IN FLEXTRONICS INTEREST, THEY GET A PLACE TO PRODUCE AND THE POSSIBILITY TO GAIN MORE KNOWLEDGE.

BECAUSE OF FLEXTRONICS KNOWLEDGE IT IS POSSIBLE TO MAKE MORE SPECIALIZED PARTS THAT ARE DESIGN TO B&O SPECIFICALLY

B&O IS LOCATED IN THE AREA SOURCE TO REDUCE COST, OR THAT IS WHAT THEY MEAN THEMSELVES. THAT IS ONE OF THE REASONS THEY GIVE TO WHY THEY HAVE STARTED TO PARTNERSHIP.

Outsourcing Process

Co

mp

eten

ce a

nal

ysis Benchmark

(org., tech)

History

Core Competences

Ass

esm

ent

& a

pro

val

Visit

Confidential Info

History

Check list (iso, csr, tech) C

on

trac

t N

ego

tiat

ion Capacity

Incentives

Risk Analysis

Penalties

Pro

ject

exe

./tr

ansf

er

Project Management

Timeline

Resources

Buget

Man

agin

g R

elat

ion

shu

p Performance

X-Ray (pro/con)

Re-negociate

Optimisation

Trust

Co

ntr

act

Term

inat

ion

Time Dep

Visualisation

Damage control

Final Assesment

Resistance during process

B&O is focused on quality , some parts of the management might not agree that they should give up control of core parts of their production.

Flextronics have a good reputation for quality products and streamline processes

plenty of reasons to go ahead with the outsourcing

BUT B&O might be able to create better quality themselves(however old facilities)

The case text does not state if Flextronics are going to take over the staff as well - safe to assume they do

Results : the staff is still as qualified, but Flextronics’ streamlined methods can produce the same products at a lower cost.

Competences B&O need for new contracts

agreement with Flextronics outsources the operation of the Skive facility

They have used the mixed and collaborative method of outsourcing (table 8.1 /8.3)

BEFORE B&O took care of day-to-day operation NOW an outsourced supplier

Consequences ?

frees up time and capital

employees- redundant or moved to other divisions

B&O will have to focus more on the regular quality control of Flextronics

maintain a wood relationship with them

Flextronics -big company hard to bully.

Other persuasive means from the purchasing department

smaller suppliers may be held in line with a more dominant approach.

Pro Con Pro Con

Benefits for B&O and Flextronics

Current status

B&OB&O have rethought their trateggies and formed partnerships with Car companies since 2004. They have had to let go of some suppliers and replace them with more convenient ones.

Current affairs can be found in their annual report 2014

http://az498215.vo.msecnd.net/static/files/annual_reports/BO_AR13-14_UK_FINAL.pdf

Latest press release title:

The Bang & Olufsen Sound System in the new Audi R8 will debut at the 2015 Geneva International Motor Show

FlextronicsThere is no trace about the partnership still exists however Flextronics Malaysia’s is now a current supplier

X-Flex’s only client

Flextronics has shifted and followed a new clientele since 2004

The latest Press release title :

Green Charge Networks Partners with Flextronics to Deploy Intelligent Energy Storage Nationwide

Factory in SkiveFlextronics closed its plant in Denmark in 2013, putting more 200 people out of a job. Now, according to a report by Skive municipality, around 80 of a total 212 former Flextronics employees have found jobs.

Read more: http://evertiq.com/news/21669

Questions?