outsourcing headaches

To Outsource or Not to Outsource

April 25, 2013 / by / 0 Comment
  • SumoMe

A tech start-up that relocates its business back to… France. This is not something you hear often. France’s Les Echos reports.

After deciding to outsourcce, a start-up returns back home, to France. This move represents a 180 degree turn for Laptopper.fr. The start-up, which specializes in the online sales of laptop and tablet accessories, nixed its Indonesian supplier to relocate all manufacturing back to France.

When Denis Broyer prepared the launch of his online shop in late 2010, he wanted to move quickly to fill a niche that seemed promising. Through his parents, both expatriates living in Indonesia, this former Google employee who was 24 years old at the time, eventually connected with a local shop offering unbeatable prices. The agreement was sealed, and LapTopper opened for business in April 2011.

The beginnings of the company’s colorful designs and laptop accessories seemed very promising and received the support from bloggers and social networks. In August 2012, the company expands its offerings to include supplies for the iPad. The new products are to be delivered by November, just before the strategic Christmas and New Year periods. Except they never arrive on time …

Lack of Responsiveness, Communication Problems: the Throes of an Outsourced Workshop.

This big miss forces the business owner to question his Indonesian partner. In hindsight, the results were disappointing. Between the time an order is placed and delivered, sometimes three months elapse. And transportation delays are not the only ones to blame. The Indonesian workshop shows major delays in getting items into production. This causes the start-up to be unable to respond quickly and efficiently to a surge in demand for its products and puts serious brakes on its lucrative B2B aspirations.

The Cost of Made ??in France? A price Increase of 20%.

Finally, the decision was made: the production would now be 100% French. After several months of research, four main suppliers are selected: two machine wood shops (PEFC label), a specialist in “green” coating and an integration company for assembly. All SMEs are located in the Vosges and in the Ain regions of France, the cradle of Laptopper.fr. Marketing for the new series of products was now imminent.

Good Idea: A Diary to Recount the Relocalization.

Since the decision was taken to relocate the production back to France, the company keeps a diary in the form of a blog called “Project Made in France.” The objective is to share the story of this strategic and rather unusual move, detail the events that led up to it, and show that “it is possible.” It is also a way to boost the reputation of the site via social networks like Facebook and Twitter. Beyond that, Laptopper.fr wants to create a true community of entrepreneurs committed to the “Made in France” philosophy.

Logical consequence of this relocation? Production costs soar by 30%. Therefore, the accessories made ??in France will cost 20% more than the previous models of Indonesian origin. But will consumers prefer low-cost competitors, most of which are “Made in China”? The executives predict that the rise in quality, the environmental dimension of its products, their design or the “made in France” argument will offset the increase in price…

 

ABOUT THE AUTHOR

Dom Einhorn is a proud Alsatian interested in a wide variety of subject matter, from literature and politics to science and sports. He speaks 5 languages fluently and calls both Wyoming and France "home." Dom is also a trivia fanatic and the editor of MastersOfTrivia.com.