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Create Successful Companies with No Resources

Entrepreneurship is difficult, but less now than 30 years ago.

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It is doubtful that this type of company, founded by well-prepared professionals and eager to turn into reality ideas that they perceived as winners, could have been born and continue their career without the abundant offer of current external services. Resorting to external suppliers has allowed the three to avoid the huge investments in industrial facilities, warehouses, machines, transport and distribution vehicles or usual administrative structures three or four decades ago, “when normal,” says business angel Luis Martín Cabiedes– it was that the companies were vertically integrated.”

By not doing, you do not even need to invest in buildings: there are industrial parks or offices. Nor in technology, given the large number of IT services in the cloud (cloud computing). The facilities have been extended in such a way that, according to Cabiedes, specialist in startups, “the task of undertaking is no longer limited by the availability of resources; now more factors such as the idea or the person of the entrepreneur count. “

EVERYTHING IS EXTERNALIZABLE

This lean model (austere in the use of own resources) not only favors new projects. The most important thing is that it gives companies a capacity to react to market changes that others do not have and reduces wage costs to a minimum.

These companies function as small management nuclei – a small number of professionals in charge of the most strategic functions – and they hire almost everything. It is not surprising that they present billings for employees well above the usual ratios. “Years ago,” they say in Accenture, “companies only outsourced support functions.”

Many of the companies that 15 or 20 years ago had an integrated and vertical model, with all the functions of procurement, design, manufacturing, logistics and transportation in their midst, have been passing many of these activities to third parties.

WHEN EXTERNALIZERS ALSO EXTERNALIZE

The trend has gone so far that the service providers themselves have also begun to outsource some of their functions. In Spain, it is common for many logistics firms to cede warehouses and transport to third parties.

“The structure of transport in our country, so fragmented, without barriers of entry and with price wars, does not compensate to invest in fleet: it is better to outsource.”

Explain in Logic, the logistics employers.

Let them make them. In manufacturing, outsourcing has exceeded all forecasts. So powerful are the outsourcers in electronics, computing or fashion that even the big multinationals have delivered their production.

These are gigantic companies that do not sound for the public, but which have become indispensable due to their enormous volumes and because they are state-of-the-art in production processes. In China, for example, there are hundreds of companies offering specialized manufacturing services such as medical optics, chemical-electronic products, military instrumentation, double welding lines or production inspection and quality control.

Unbeatable giants. Although China is already the great center of industrial outsourcing of the world, Taiwan has giants like Foxconn, one of the largest in electronics and that never ceases to acquire new operations all over the world. Recently, it caused astonishment when announcing that it intends to buy close to a million robots in the coming years. Another is Flextronics, in Singapore, with plants in 30 countries and that produces and assembles for sectors such as the automobile, computing or mobile telephony.

I + D

Also this, one of the most strategic functions, has been coming out of the internal organizations of the companies. In Farmaindustria recognize that “a decade ago, the bulk of pharmaceutical R & D was made in the company: now, 80% is done outside: in public and private institutions, universities and specialized companies.”

PROCUREMENT

The procurement (purchase of provisions), which began years ago with non-essential purchases such as office material, computers or fleets, has entered the heart of the business. “For years we have taken care of the purchase of production inputs,” they explain in the consultancy Accenture. In addition to making purchases in better conditions, since it operates on an international scale, the outsourcer deals with the transport and processing.

LIFTING THE WAY

But, this process of delivery of production to third parties finds its resistance. Some companies have begun to fear the loss of know-how that involves giving important functions to third parties. And also the quality failures.

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