The 7 Deadly Sins of Outsourcing Print E-mail
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Written by Charlie Barnhart   
Tuesday, 30 September 2008 19:00

And how to heal the "fundamentally broken" supply chain relationship.

Global Sourcing Medieval scholars and church officials, arguably the management consultants of their age, cite a list of attitudes to avoid, in an effort to get their clients on track toward a good life. The “Seven Deadly Sins” were first developed by John Cassian in the 5th Century, and then refined by Pope Gregory a hundred years later. This list inspires poets, artists, blog writers and comedians, among others, to this day. A more positive spin on the list, called the “Seven Holy Virtues,” was developed by Aurelius Clemens Prudentius in his epic poem Psychomachia around 410 AD.

Ultimately, the principles of both the Seven Deadly Sins and their heavenly counterparts are intended to provide guidelines to better relationships. Based on our research and experience over the past 20 years in the electronics manufacturing industry, it is my belief the outsourcing relationship as practiced in the 21st Century is fundamentally broken. This is not entirely due to the behaviors and attitudes of those hardworking men and women who practice this noble profession, but it is clear the entire industry is experiencing a seismic shift. Some might even say future generations of electronics manufacturers will look back at this time as the Dark Ages of electronics because of some glaringly irrational behaviors. Hopefully, future generations will not dump electronic waste into landfills of the future six months after purchase as a result of shoddy workmanship, poor design or counterfeit components. As the industry re-engineers itself, I humbly offer to the esteemed readers of Circuits Assembly a series of articles intended to get us back on track to the good life we all would like to deserve.

Pope Gregory offered the list in Latin, of course, with a convenient mnemonic device to help people remember it. The word SALIGIA is derived from the first letters in Latin of the Seven Deadly Sins:
  1. Superbia (pride).
  2. Avaritia (greed).
  3. Luxuria (lust).
  4. Invidia (envy).
  5. Gula (gluttony).
  6. Ira (wrath).
  7. Acedia (sloth).
Needless to say, each has a corresponding analog in outsourcing (doesn’t everything?) that leads to problems:
  1. Self-righteousness.
  2. Asymmetry.
  3. Lavishness.
  4. Imitation.
  5. Gamesmanship.
  6. Impatience.
  7. Apathy.
The corresponding Seven Holy Virtues are sometimes referred to as the Contrary Virtues. (Being a “contrarian” is why I like them so much!) Table 1 illustrates how they fit together.

Image

Going one step further in understanding this chart, in the outsourcing world, each of the deadly sins has as its consequence the impossibility of achieving the positive “holy virtue.” Over the coming months, I will expand and explain what I mean by each of these connections. For example, in the first row, in the outsourcing relationship, when the “sin” of self-righteousness exists between the parties, openness in communication is prevented. When there is asymmetry between the OEM and the EMS provider, there can be no reciprocation, defined as a healthy, mutually beneficial relationship instead of a master/slave situation.

Continuing down the list, when the OEM (typically) insists on lavish financial expenditures that do not serve the interest of either party, the outsourcing dividend is squandered. When imitation replaces innovation, we lose competitiveness in the global marketplace. When one party engages in gamesmanship surrounding irrational cost reductions and relentlessly lower margins, the EMS provider begins to make business decisions based on desperation rather than strong ethical values. When all these conditions continue, the relationship deteriorates, and any issue is blown out of proportion due to “impatience.” And ultimately, the parties just give up, and apathy takes over.

You see where this is going. Over the next few months, we will take each of these deadly attitudes and explore them in depth. Our goal: to help catapult the industry into the Renaissance of outsourcing. We want to help unleash the power and creativity of technology and those fine individuals who deliver it to the world.

Charlie Barnhart is principal and co-founder of Charlie Barnhart and Associates (charliebarnhart.com); This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

 

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