Monday, October 30, 2006

The Perils of Outsourcing

Apple and Dell did it. So can you. Outsource non-strategic business processes. They outsourced batteries to Sony Corp. They faced the concequences. About 10 million defective batteries were shipped in the laptops. And it could have been detrimental to consumers life and property. In worst case a laptop caught fire in amidst a business presentation. Now to the more juicy part of who is to the blame, the OEM or the agency. Who is responsible for the final quality check to be done, the part manufacturer or the product assembler. How could the defective products pass two layers of quality check. What should be done to avoid such goof-ups by high profile world class MNC's? Obviously responsibility can be outsourced, not accountability. Ultimately Apple and DELL are accountable for the mess. They can sue Sony, but nothing can restore the damage to their brand equity.

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