By Gina Roos EETimes Supply Network (09/13/2007 12:42 PM EST)

Foster City, Calif. — Results from an outsourcing survey conducted by Arena Solutions, a product lifecycle management (PLM) provider, and Symphony Consulting, a supply chain service company, reveal that while 85 percent of the 800 manufacturers surveyed outsource part or all of their manufacturing operations, nearly two-thirds of them put their associated savings at risk because they lack adequate control and processes.

The survey indicates that these manufacturers still use manual processes such as phone calls, faxes, and e-mails with spreadsheets to communicate with their suppliers. Arena reports that over 52% of the companies in the study suffered from hard dollar losses due to communication and documentation errors, which included rework, scrapped inventory, excess materials and product recalls.

The study also found a majority of companies that outsourced manufacturing faced a number of significant challenges when working with their contact manufacturers (CMs), including coordinating new product introductions, managing and communicating product changes, and communicating information across organizational and geographic boundaries, said Arena, and nearly eight out of 10 believe closer involvement and tighter control and processes with their CMs would reduce new product delays.

Arena said only 32 percent of respondents currently use a product lifecycle management (PLM) system as a shared "information infrastructure" to manage product information and share it with their CMs. The PLM provider also noted that companies that have a PLM system experience fewer outsourcing problems compared to companies that rely on manual processes for communication regarding new product introduction, change order management and environmental compliance management issues. Three out of four of the respondents who currently use manual processes are taking steps to improve their systems.

To learn more about the survey results, Arena Solutions and Symphony Consulting will hold a free webcast on Thursday, September 13, 2007 from 10-11 a.m. Pacific time for anyone involved in the outsourcing process. To register (required) call 1-866-937-1438 or click here.

In addition, on Wednesday, Oct 17, 2007 from 9 a.m. to 4 p.m., Symphony Consulting will host a best practices forum on manufacturing outsourcing. Click here for more information.