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Insourcing To Improve Employee Productivity In Automotive Industry - Analysis

Image used for representative purpose only. (Image: Reuters)

Image used for representative purpose only. (Image: Reuters)

Here are the major reasons why insourcing (compared to outsourcing) can benefit the future of the automotive industry.

The automotive industry is experiencing a paradigm change in the current revolution in Industry 4.0 with increasing digitization and growth in data driven technologies. The automotive industry is leading towards the development of smarter and intelligent vehicles which require the implementation and understanding of smarter technologies and sophisticated systems. In such situations the organizations require a workforce which is proficient in the most advanced and updated technologies in order to ensure that the implementation is efficient and as per the requirements of the global industry.

Insourcing is one such out-of-the-box methodology to ensure automotive industry heads in the right way. Insourcing means - 'the practice of using an organization's own personnel or other resources to accomplish a task'. Below are the major reasons why insourcing (compared to outsourcing) can benefit in this situation by enabling the workforce of the automotive companies.

Stay ahead in the technology race in-house

The pace at which technology is advancing is blinding. In order to keep up with the technology, the automotive industry can either outsource the tasks to entities that are well-versed in the advanced technologies or develop an in-house team trained in the same technology. It is needless to say that the second option is perennial and permanent and keeps several options open when it comes to flexibility and operational change.

Ensure technological advancement with Intellectual Property

Outsourcing research and development projects is probably not one of the better ideas which automotive organizations should get into. Outsourcing RnD projects can be a very risky maneuver which may lead to ideas being stolen and marketed as third party properties with certain tweaks here and there. The option to ensure correct and safe Research and Development is always in-house, even though it may require the workforce to be trained and enabled in the new technology, which is essentially possible through insourcing solutions.

Cost cutting at several levels

With the growing industry, the one economical prospect of outsourcing is looking meek with each passing day. It becomes very important that outsourcing is not done blindly and all the pros and cons are properly weighed and understood before taking a decision. Insourcing emerges as a very beneficial and advantageous solution that ensures cost cutting and revenue improvement by enabling the workforce itself to deliver the business of the organization in a better manner. The costs of sourcing the task to external entities are eliminated and with a one-time investment in enabling the workforce, the organizations can gain profits in a continuous manner.

Clear and effective integration of departments

Outsourcing usually has the issue of misinterpretation and miscommunication which often leads to bad results. Having the entire operation and process in-house ensures that the goals are the same and the integration is absolutely crystal clear with everyone on-board and working at the same site. With continuous interaction, information exchange and communication, the results are much better than what would happen if one segment of the process is outsourced to an external entity.

These reasons further signify why the automotive organizations today are moving towards insourcing solutions instead of outsourcing the tasks. The reasons are simple and understandable with extended and persistent advantages.

Story Credit - Sumit Peer, Founder and CEO - Aurelius Corporate Solutions