Out of last week’s discussion centered on Sony’s battery issues and the impact it could have on branding and customer relationships came a very interesting question from Mike a frequent commenter:

“In your opinion, do you feel these quality issues have anything to do with globalization of the workforce?”

My Take
Globalization and outsourcing absolutely has an impact on performance and reliability of a product. That’s not to say that a product cannot be a quality product when you introduce these factors just that the potential for issues goes up dramatically.

Some risks that globalization and outsourcing bring in:

Disparate systems: And I’m not just talking metric to the standard system conversion. We’re talking the back-end systems that each branch is utilizing, different production methods, quality control etc.

Methodologies: I’ve done enough training in my life to see the difficulty in introducing new methodologies to groups that haven’t been properly introduced to it (bought in). They may nod their heads, and get the right answers in the classroom environment but once back on the job all knowledge gleaned is quickly discarded. Different management styles also create additional barriers to change as well.

Cultural differences and values: This might just be the biggest issue that you’ll face. In the book Outliers Malcolm Gladwell shows how cultural differences increase the expectancy of an airplane crash exponentially, this is a lesson for any industry. How people treat authority, view their own autonomy, think critically, and address issues; are all directly impacted by their society and its social norms.

Specialization: Compartmentalization is not without risks, it breeds an environment where very few people have a clear view of the entire process. On top of that people who work on the smallest widget may not have a clear idea of how it will be implemented into the final good. This robs the entire system of the ability to leverage the human capital of those working throughout the entire chain of supply.

Distance and Logistics: The more barriers you put between a manager and their subordinants the worse the impact on the product. Management is all about communication and visibility into the work flow. No matter how good of a manager you are, without seeing the conditions of the plants and staying on top of those you delegate work to will cause an impact on the finished good.

Incentives: While the end goal may be to produce XYZ product outsourcing production leads to a variety of different goals and incentives for each player. All it takes is one link in the chain to prioritize a different way than the customer company is expecting and problems could result.

Conclusion
Go in with open eyes outsourcing is a risk to your brand. Anything from quality of materials, to working conditions, or even illegal activities from your partners can become a black mark against your brand. The reality is most companies that manufacture goods don’t have an option but to outsource, but through rigorous planning and management of your product as it flows through all stages of production will minimize the damage that could be done.