Most manufacturers producing a wide range of goods regularly face situations where it is more cost-effective to outsource (part of) an order to colleagues in their dangerous business.

The reasons may vary widely: working to capacity at the moment, a small lot, the order including non-core articles while the customer wants to receive all from one supplier, etc.

For companies with a broad assortment of products and a lot of customers, outsourcing some work areas to external manufacturers is an organic part of their business, and the enterprise’s efficient work is inconceivable without it.

Rosshokolad is a vivid example of such a manufacturer.

BEFORE they switched to Ultimate Industrial, orders involving external contractors were processed by specially allocated staff.

In addition to their obvious functionality consisting in the placement, approval and follow-up of orders with external counterparties, the contractor managers were busy co-ordinating those with captive production, as not only whole articles but individual stages of a specific lot’s manufacturing process may be outsourced.
For example, a sub-contractor makes and supplies a lot of products on pallets, figuratively speaking, and the packing for the client is made and the goods are packed in-house. The contract manager is thus expected to synchronise, in close co-operation with the factory managers, the shipment of the semi-finished product
from the external contractor and its timely feeding into the right own production step in his company.
As our readers who have faced such schemes in the field may guess, ’close co-operation’, ’synchronise’, etc. are not more than theoretical terms — "Dreams and Sounds" © N.A. Nekrasov, a Russian poet.

Every customer’s order that entailed cross-communication with external contractors was naturally much more fault-intensive than a regular order that could be fulfilled by captive production.
While captive promotion also abounded in faults, generally speaking.

And here is the AFTER scene.
“Specially allocated staff’ have been a little more than fully eliminated.
Orders involving outsourcing are processed by regular sales managers for whom, in turn, such orders are no different from others.

In the process chart template, the stage(s) to be outsourced are marked by checking the Outsourcing box.
Where an article is wholly produced by a contractor and supplied ready for shipment to the customer, the process chart template will include a single step with its box checked.
For each outsourced stage, the respective supplier/contractor is indicated.

In the process of forming a production assignment, an order document for the respective supplier is automatically formed for each step to be outsourced.
Product design files are attached to the order. The order letter with its design images attached is e-mailed to the supplier.
Just E-mailed, because Rosshokolad’s contractors are no more advanced in business process automation than the company itself used to be in its BEFORE era.
In less primeval markets, Ultimate will place orders into the supplier’s corporate information systems directly, without human interference.

Then, after the product arrives from the supplier (if ready for shipment), it is automatically reserved for the client.
Where the supplier ships a semi-finished product, an order for transferring it ​to the required work site will be formed automatically.

Formalised and automated interaction with external contractors enabled the company to expand its assortment by 30%. The number of faulty orders decreased dramatically.
This has already boosted their sales by at least 10% without any further investment, while the ultimate effect is cumulative and must be fully realised within a year or two.