n. No vendor should receive a time extension unless they all receive it.

9. When the RFQs are returned, a spreadsheet can be prepared to compare costs. Where necessary, written verbage can be used to demonstrate added commitments that the particular vendor will include in his costs. For example a vendor may include pick-up and delivery to every organization at no additional charge. This spreadsheet is extremely important because you will want to use it to prepare a Powerpoint Presentation for upper management when presenting your proposed project for final buy off.

10. Once you have selected the winning bidder (it does not always have to be based upon cost) i

I have spent many years in purchasing or a production arena which required outsourcing at times. I have outsourced printing, duplicating, and microfilming, as well as outsourcing a Copy Center of a large pharmaceutical firm. I will share my thoughts on how to create a successful outsource relationship with a vendor.

1. Before you outsource, make certain that the department having the need has the backing of upper management. Purchasing, finance, legal department (if you have one), in addition to the department needing the assistance should be involved.

2. Discover exactly why you need to outsource. This will help you determine what you may need to do for future plant improvements and staffing. Example: You are going to outsource because you do not have enough plant capacity to produce the item; or, you do not have adequately trained staff to produce it; or, it may be more cost effective to produce it at a vendor.

3. With the assistance of Human Resources, Finance, Accounting, and the department in need, determine ALL the costs of producing the item in house: Man hours, electrical requirements, water, heating and cooling, labor costs, machine cost/hour etc. Once you know what your costs are, now you can begin to locate qualified vendors.

4. I have always employed a team of people who had a stake in the proposed outsourcing program. In one Company, the team was comprised of the Marketing, Legal, Purchasing and Administrative Services. The outsourcing project was to determine whether it was cost effective to bring in a vendor to supply the firm with in plant copying.

5. Once you have chosen at least three suppliers, based upon quality, capability, testimonials of some of their customers, and viewing some of their operations, you can progress to the SOW (Statement of Work).

6. The SOW MUST contain all of the elements or tasks that will be performed by the outsourced party.

7.. The Request for Proposal will contain such items as: defining the hours of operation, who authorizes the overtime if it is needed, who does the outsourced group report to, which Company has the right to hire or fire, the length of the contract, the anticipated production numbers to be produced, whether the vendor will be permitted to subcontract some of the production work etc.

8. Once the RFP has been prepared, a letter and a RFQ (Request for Quote) should be prepared inviting the selected suppliers to bid on the proposal, Each supplier MUST receive the exact same proposal with no variations. Give the proposed vendors an exact date as to when the RFQ must be returned. Emphasize that the RFQ must be signed off by a Corporate official and not a salesman. No vendor should receive a time extension unless they all receive it.

9. When the RFQs are returned, a spreadsheet can be prepared to compare costs. Where necessary, written verbage can be used to demonstrate added commitments that the particular vendor will include in his costs. For example a vendor may include pick-up and delivery to every organization at no additional charge. This spreadsheet is extremely important because you will want to use it to prepare a Powerpoint Presentation for upper management when presenting your proposed project for final buy off.

10. Once you have selected the winning bidder (it does not always have to be based upon cost) it

ure plant improvements and staffing. Example: You are going to outsource because you do not have enough plant capacity to produce the item; or, you do not have adequately trained staff to produce it; or, it may be more cost effective to produce it at a vendor.

3. With the assistance of Human Resources, Finance, Accounting, and the department in need, determine ALL the costs of producing the item in house: Man hours, electrical requirements, water, heating and cooling, labor costs, machine cost/hour etc. Once you know what your costs are, now you can begin to locate qualified vendors.

4. I have always employed a team of people who had a stake in the proposed outsourcing program. In one Company, the team was comprised of the Marketing, Legal, Purchasing and Administrative Services. The outsourcing project was to determine whether it was cost effective to bring in a vendor to supply the firm with in plant copying.

5. Once you have chosen at least three suppliers, based upon quality, capability, testimonials of some of their customers, and viewing some of their operations, you can progress to the SOW (Statement of Work).

6. The SOW MUST contain all of the elements or tasks that will be performed by the outsourced party.

7.. The Request for Proposal will contain such items as: defining the hours of operation, who authorizes the overtime if it is needed, who does the outsourced group report to, which Company has the right to hire or fire, the length of the contract, the anticipated production numbers to be produced, whether the vendor will be permitted to subcontract some of the production work etc.

8. Once the RFP has been prepared, a letter and a RFQ (Request for Quote) should be prepared inviting the selected suppliers to bid on the proposal, Each supplier MUST receive the exact same proposal with no variations. Give the proposed vendors an exact date as to when the RFQ must be returned. Emphasize that the RFQ must be signed off by a Corporate official and not a salesman. No vendor should receive a time extension unless they all receive it.

9. When the RFQs are returned, a spreadsheet can be prepared to compare costs. Where necessary, written verbage can be used to demonstrate added commitments that the particular vendor will include in his costs. For example a vendor may include pick-up and delivery to every organization at no additional charge. This spreadsheet is extremely important because you will want to use it to prepare a Powerpoint Presentation for upper management when presenting your proposed project for final buy off.

10. Once you have selected the winning bidder (it does not always have to be based upon cost) i

utsourcing program. In one Company, the team was comprised of the Marketing, Legal, Purchasing and Administrative Services. The outsourcing project was to determine whether it was cost effective to bring in a vendor to supply the firm with in plant copying.

5. Once you have chosen at least three suppliers, based upon quality, capability, testimonials of some of their customers, and viewing some of their operations, you can progress to the SOW (Statement of Work).

6. The SOW MUST contain all of the elements or tasks that will be performed by the outsourced party.

7.. The Request for Proposal will contain such items as: defining the hours of operation, who authorizes the overtime if it is needed, who does the outsourced group report to, which Company has the right to hire or fire, the length of the contract, the anticipated production numbers to be produced, whether the vendor will be permitted to subcontract some of the production work etc.

8. Once the RFP has been prepared, a letter and a RFQ (Request for Quote) should be prepared inviting the selected suppliers to bid on the proposal, Each supplier MUST receive the exact same proposal with no variations. Give the proposed vendors an exact date as to when the RFQ must be returned. Emphasize that the RFQ must be signed off by a Corporate official and not a salesman. No vendor should receive a time extension unless they all receive it.

9. When the RFQs are returned, a spreadsheet can be prepared to compare costs. Where necessary, written verbage can be used to demonstrate added commitments that the particular vendor will include in his costs. For example a vendor may include pick-up and delivery to every organization at no additional charge. This spreadsheet is extremely important because you will want to use it to prepare a Powerpoint Presentation for upper management when presenting your proposed project for final buy off.

10. Once you have selected the winning bidder (it does not always have to be based upon cost) i

o authorizes the overtime if it is needed, who does the outsourced group report to, which Company has the right to hire or fire, the length of the contract, the anticipated production numbers to be produced, whether the vendor will be permitted to subcontract some of the production work etc.

8. Once the RFP has been prepared, a letter and a RFQ (Request for Quote) should be prepared inviting the selected suppliers to bid on the proposal, Each supplier MUST receive the exact same proposal with no variations. Give the proposed vendors an exact date as to when the RFQ must be returned. Emphasize that the RFQ must be signed off by a Corporate official and not a salesman. No vendor should receive a time extension unless they all receive it.

9. When the RFQs are returned, a spreadsheet can be prepared to compare costs. Where necessary, written verbage can be used to demonstrate added commitments that the particular vendor will include in his costs. For example a vendor may include pick-up and delivery to every organization at no additional charge. This spreadsheet is extremely important because you will want to use it to prepare a Powerpoint Presentation for upper management when presenting your proposed project for final buy off.

10. Once you have selected the winning bidder (it does not always have to be based upon cost) i

n. No vendor should receive a time extension unless they all receive it.

9. When the RFQs are returned, a spreadsheet can be prepared to compare costs. Where necessary, written verbage can be used to demonstrate added commitments that the particular vendor will include in his costs. For example a vendor may include pick-up and delivery to every organization at no additional charge. This spreadsheet is extremely important because you will want to use it to prepare a Powerpoint Presentation for upper management when presenting your proposed project for final buy off.

10. Once you have selected the winning bidder (it does not always have to be based upon cost) it is extremely important to sit down with the supplier and the department(s) the supplier will be servicing and establish EXPECTATIONS. For an example of expectations I will return to my example involving the Copy Center I (with my comrades) established at a major pharmaceutical firm. We devised the following quality grade card that accompanied EVERY project that left the copy center, no matter how small or large. On this card, the following information was requested: Timeliness, Quality of reproduction, Staff responsiveness, Staff helpfulness, Followed instructions. Each of those items were rated on a scale of 1-10 (10 being best). There was also room for additional comments. The project originator was then asked to send the QC card back to the copy center so that it could be reviewed as to what went right and what went wrong. As an incentive for people to return these QC cards, we would randomly select one card at the end of the month and the party who was selected would receive a FREE lunch in one of the Company cafeterias. You may be thinking about how this system worked out. Very well, if I say so myself. The first year, the vendor was operating at a 97.7 average rating. I will also state that these QC ratings became a very high source of pride to the supplier and its employees. They even asked permission to promote their successes to other possible clients.

This is not meant to be a comprehensive dissertation on outsourcing, but I hope that it will assist anyone who is at the point of having to have the services performed outside or by a service group inside. Also, this outline for outsourcing can be applied to any services needed, such as maintenance, landscaping, printing, custodial work, cafeteria staffing, etc.

Until next time.

Charles "Jitiy" Vaughn