As a consulting report for Orange County Choppers, this document combines some changes which, if implemented can help your business run more efficiently. By changing current practices and implementing a strict project management structure, costs will decrease, turnaround time will decrease, and the overall quality and value of your brand name and product will increase.

In your case, your core competency consists of motorcycle (chopper) design, small metal part fabrication, personal innovation techniques based on customer requests / desires and overall high quality integrated into the finished product. There are many elements related to these competencies which should be kept in-house. Typically these items will be linked to the aesthetics of the motorcycle, as this coincides with overall design. Since these items (things like exhaust, fuel tanks, handle bars, and fenders) are intricate to your core competencies, manufacturing capital (machines), and human capital (new employees) should be purchased or hired to facilitate the functioning under this premise. Also by keeping these items in-house, you circumvent problems that arise from vendors such as: missed deadline, improper fit (gas tank), re-work expenses (oil tank), and the time loss associated with these issues. Outsourcing these types of items can take away from your brand recognition and can cause quality issues like parts that do not fit, or need to be re-fabricated in order to fit.

Items that should be outsourced are those which do not contribute directly to your core competency; however, when deciding who to outsource to, the quality and value of the products should be considered, as it is a core competency element. Consider your engines. They are paramount to the functionality and performance of the motorcycle, though they do not comprise any relation to your core competency except in quality. Therefore, when considering who to outsource engine manufacturing to, make sure the company is in tune with your aesthetic demands and performance requirements. This holds true for all items that will be outsourced. Because much of your work is under time constraints, you must be sure that any company you outsource to will be able to meet your schedule requirements, and that they will deliver quality parts. Time management is critical, all deadlines should be clearly communicated to vendors and a mutual time frame should be agreed upon before production begins. Also clear communication on what is expected from the company (schedule, design, performance), ensures both companies operate more efficiently, avoiding monetary waste and time loss.

Customer demand is paramount to your core competency. Outsourced items must be up to par with the quality and aesthetic design your company implements during the manufacturing process. Communication and direct effort to keep suppliers informed of your needs is the foundation of a healthy outsourcing structure. Price should be of almost no concern on items that conspire to create much of the value integrated in your product. If the frame and engine are poor quality, the very foundation of your product is compromised and thus has little value to customers. Instead, focus on the quality of the merchandise: does it meet your needs, does it add value to your product, and is it delivered on schedule and in the expected condition. Small ticked items, nuts and bolts for instance, are of much less value per se, and should probably be considered largely on price as they have little effect on a customer’s value attribution.

In order to make the best decisions for outsourcing, focus on customer desires, and the best ways to fulfill those desires based on your core competency. Because your name recognition and quality standards ride on your ingenuity of design and fabrication, it is important to make sure that your are not merely assembling someone else’s parts, but that your work is represented in the fabrication process. Since your shop has the capacity to produce quality metalworking, and because this adds value to your product, it should be utilized and developed. By implementing these changes in your process, you will realize a more efficient and effective approach to building motorcycles that is based inherently on your core competencies.