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Free of charge: Manufacturing Success - Two Pronged Strategy for IT Infrastructure Outsourcing

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This article by Kathleen Goolsby looks at the experience of Lear Corporation, the world's Largest Automotive interior Systems Supplier, working with Compuware Corporation to deliver an outsourced solution to increase Lear's flexibility to adapt to changing business operations. 'When you're serving customers like Chrysler, Ford, and GM,' explains Brian Vautaw, vice president of Information Technology at Lear, 'you really have to be able to turn on a dime to accommodate their changes.' (PDF file, 2 pages, 168 KB)

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Unformated preview of the document: 'Manufacturing Success - Two Pronged Strategy for IT Infrastructure Outsourcing' (Part 2):

Outsourcing the Risks for Implementing New IT Systems
Part of success in business is knowing where to turn for the
essentials. Lear turned to Compuware again when the manufacturing
giant encountered an additional unanticipated sharp curve in the
road.
Compuware's service to Lear expanded with the increased use of a
shop floor application for sequencing the shipment of parts to Lear's
customers. Initially required only by Ford, other automotive
customers have begun requiring the sequencing. This new challenge
came on like gangbusters. Although Compuware had developed the
software earlier to help Lear with sequence shipping to Ford, it was
developed to work with the old ERP system. So Compuware stepped
up to the plate and worked with Lear to make the software more
generic so that it would work with other manufacturing software
installed at Lear's plants.
Beyond having Compuware to support the old ERP system - and
implement a major new release of the system -- while maintaining
service level agreements, Lear gains the added value of strong
collaboration from this outsourcing relationship. Together, they
create innovative solutions for new needs arising in Lear's factories. Some right-hand/left-hand car parts, for
example, are mirror images of each other. Compuware and Lear worked together to develop a labeling print-ondemand
process to ensure the right/left labels would not be placed on the wrong components.
Business success for individuals often rests on making the right connections. For companies, success today rests on
making the right strategic alliances to help them take advantage of opportunities. With Compuware as its alliance
partner, Lear won't be bitten by the risks of implementing IT infrastructure to enable its growth strategies.
Publish Date: March 2004
Outsourcing Contracts Advisory
Outsourcing is a long-term relationship, so
contractual provisions must be structured
for flexibility, as changes in the buyer's
business environment, as well as emerging
technology will impact the relationship
over time. While a fixed-price strategy may
have initial advantages, it could become
the cause of dissatisfaction (for either
party) over time if:
• the buyer's business volume
decreases; or
• the agreed goals over time are to
ramp down the number of people
from the outsourcing company
who are providing services to the
buyer (thus, decreasing costs for
the buyer but also reducing the
provider's revenue), but new
scope is added over time.
Structure your outsourcing agreement with
a master services contract for the longterm
relationship and as an umbrella for
various service agreements or Statements
of Work to handle ramping up and down in
scope.



Unformated preview of the document: 'Manufacturing Success - Two Pronged Strategy for IT Infrastructure Outsourcing':  Part 1, Part 2

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