Evolution of Singapore manufacturing business : outsourcing as a key manufacturing strategy

Abstract

This report discusses about the manufacturing outsourcing in Singapore, which the author believe that when executed successfully, manufacturing outsourcing can help businesses reduce costs and working capital while maintaining and even improving product quality and design. It can even speed up supply chain velocity, by facilitating closer proximity and technical integration with supply chain partners. As the IT hardware and consumer electronics markets have become increasingly price aggressive, Original Equipment Manufacturers (OEMs) like HP, Lexmark, Sony and Apple find profit margins shrinking to less than adequate levels. Risking substantial loss in market share by increasing price, OEMs are forced to look to margin increases by more efficiently managing back end costs. As a result, they have increasingly turned to less labor-intensive regions of the world to fulfill manufacturing needs, outsourcing up to all of the product manufacturing/development to contract manufacturers.