university class material

1. VCM-PUNVA-2ND SEM
FREDERIKKE LOUISE RISGAARD
VALENTINA T. DUMITRACHE
ASBJØRN GULDBORG
NERESHRATNAM RAMACHANDRAN MOORTHY

2. Agenda
 Outsourcing to Flextronics (Outsourcing matrix +matrixes explained)
 Outsourcing Process key elements
 organizational level decision making
 Resistance during process
 Competences B&O need for new contracts major changes
 Benefits for B&O and Flextronics pro’s and con’s
 Current status
 B&O
 Flextronics
 Factory in Skive

3. Outsourcing to Flextronics
BY USING FLEXTRONICS B&O ARE SURE TO GET
THE QUALITY THEY WANT.
A GOOD CORPORATION WHERE THEY GET
THE IDEAS (INNOVATION) AND FLEXTRONICS
HELPS THEM PRODUCING THE NECESSARY PARTS.
B&O IS IN-HOUSE/INVEST.
 USAGE OF FLEXTRONICS KNOWLEDGE TO
THEIR OWN BENEFIT.
 IN FLEXTRONICS INTEREST, THEY GET A PLACE
TO PRODUCE AND THE POSSIBILITY TO GAIN
MORE KNOWLEDGE.

4. BECAUSE OF FLEXTRONICS
KNOWLEDGE IT IS POSSIBLE TO MAKE
MORE SPECIALIZED PARTS THAT ARE
DESIGN TO B&O SPECIFICALLY
B&O IS LOCATED IN THE AREA SOURCE
TO REDUCE COST, OR THAT IS WHAT
THEY MEAN THEMSELVES. THAT IS ONE
OF THE REASONS THEY GIVE TO WHY
THEY HAVE STARTED TO PARTNERSHIP.

5. Outsourcing Process
Competenceanalysis
Benchmark
(org., tech)
History
Core
Competences
Assesment&aproval
Visit
Confidential
Info
History
Check list (iso,
csr, tech)
ContractNegotiation Capacity
Incentives
Risk Analysis
Penalties
Projectexe./transfer
Project
Management
Timeline
Resources
Buget
ManagingRelationshup
Performance
X-Ray
(pro/con)
Re-negociate
Optimisation
Trust
ContractTermination
Time Dep
Visualisation
Damage
control
Final
Assesment

6. Resistance during process
 B&O is focused on quality , some parts of the management might not agree that they
should give up control of core parts of their production.
 Flextronics have a good reputation for quality products and streamline processes
 plenty of reasons to go ahead with the outsourcing
 BUT B&O might be able to create better quality themselves(however old facilities)
 The case text does not state if Flextronics are going to take over the staff as well - safe to
assume they do
 Results : the staff is still as qualified, but Flextronics’ streamlined methods can produce
the same products at a lower cost.

7. Competences B&O need for new contracts
 agreement with Flextronics outsources the operation of the Skive facility
 They have used the mixed and collaborative method of outsourcing (table 8.1 /8.3)
 BEFORE B&O took care of day-to-day operation  NOW an outsourced supplier
Consequences ?
 frees up time and capital
 employees- redundant or moved to other divisions
 B&O will have to focus more on the regular quality control of Flextronics
 maintain a wood relationship with them
Flextronics -big company  hard to bully.
 Other persuasive means from the purchasing department
 smaller suppliers may be held in line with a more dominant approach.

8. Pro Con Pro Con
Benefits for B&O and Flextronics

9. Current status
B&O
B&O have rethought their trateggies and
formed partnerships with Car companies
since 2004. They have had to let go of
some suppliers and replace them with
more convenient ones.
Current affairs can be found in their annual
report 2014
http://az498215.vo.msecnd.net/static/files
/annual_reports/BO_AR13-
14_UK_FINAL.pdf
Latest press release title:
The Bang & Olufsen Sound System in the
new Audi R8 will debut at the 2015 Geneva
International Motor Show
Flextronics
There is no trace about the partnership
still exists however Flextronics
Malaysia’s is now a current supplier
X-Flex’s only client
Flextronics has shifted and followed a
new clientele since 2004
The latest Press release title :
Green Charge Networks Partners with
Flextronics to Deploy Intelligent Energy
Storage Nationwide
Factory in Skive
Flextronics closed its plant in Denmark in
2013, putting more 200 people out of a
job. Now, according to a report by Skive
municipality, around 80 of a total 212
former Flextronics employees have
found jobs.
Read more:
http://evertiq.com/news/21669

10. Questions?