Suppliers Take Control: The Outsourcing of Project Management

Cost-cutting efforts and professional labor shortages have motivated automotive manufacturers to focus their resources to their core competencies, and outsource peripheral activities to outside suppliers. By outsourcing the manufacturing of machine tools and assembly equipment to Original Equipment Manufacturers (OEMs), the automakers have been able to maintain this focus as production technology has advanced. The need for standardization of this production equipment, however, has forced the automotive manufacturers to internalize the management of the OEM development efforts.

The intent of this paper is to demonstrate the benefits of outsourcing this Project Management role, and identifies the ideal qualifications for this Management service. Finally, this paper concludes that the sole-sourced vendor of control, automation, and electrical components is ideally positioned to serve in this Project Management capacity.