Lets assume that you are outsourcing your own production, not trading on a new product. Ideally, you are a manufacturer so in fact you know more about the product than your vendor. So, what steps can you take to a: find a reliable vendor, and b) ensure the vendor delivers the product you need when you need it.

First, recognize that consistent quality, lot after lot, is achieved by very few companies. 6-sigma is a far-reaching and distant target for almost all companies. Accept that there will be orders that go wrong.

Secondly, it's sometimes hard to determine if a bad shipment occurs because of poor production, poor packing, or shipping-related, and it can take time to attribute the cause. So your objective should be to minimize the occurrence of errors, not eliminate them. I know this is an anathema to many quality advocates, but I am only referring to sourcing from developing countries, not Japan, Germany or USA. Reality is that the vast majority of managers in China/India have not been raised with, and thus have no concept of, western quality standards.

The steps I have found work are: develop a company relationship; plant inspections / approvals; raw materials control; product and production controls; product and pre-shipment approval; post-shipment inspections; documentary / payment controls.

1. Company Relationship (China):

a. Establish a relationship with senior management (meals, drinking etc). Establish trust first.

b. Make sure one key senior manager is appointed to be the conduit between your company and theirs. This person must have authority to negotiate both with you and the plant. In many Chinese companies, a VP you work with will likely need to negotiate and cajole the plant's Director to move in a certain direction. Decision making is less solid-line, and more dotted-line.

c. Make sure whomever first meets with the vendor can be credibly, and readily established as a product & market specialist. Be prepared to share enough information with them to make them respect your capabilities in the market. Good Chinese manufacturers take pride in where their products go, and it helps to be able to show them that you have the where with all to market the product well. Be humble, but clear about your capabilities

d. Teach them! If you know how to make the product correctly, show them. Yes, you are giving away your secrets, but if you don't share what you know works and what does not, then the manufacturer can't be blamed if they get it wrong.

e. When you visit the plant, be sure to be given permission to interact with lower level managers. If you have established trust, first, then this will not be an issue. These people will be most important to the quality of your product. Teach them, ask them, show them.

f. Do not impose, or seek, penalties for late deliveries or rejected product. If you start with this, you are stating very clearly that you don't trust the supplier.

g. If possible, have a sourcing team based in China. Not to look over the supplier's shoulders, this just breeds antagonism, but rather to facilitate decision making and training.

2. Company Relationship (India):

a. Try to find a connection to a supplier through your close networks. Ideally, a senior manager at the supplier is connected to you by no more than 3-degrees of separation. In India, this is the best way to establish some sort of relationship that can be somewhat trusting. Ask, and keep the mutual connections in the loop as to the macro-events in your relationship

b. Talk up your capabilities. Do not share too much information on who your customers are. Share information about volumes and growth and vague references to accounts. No need to be too humble. You'll need to impress them to be taken seriously (most Indian companies believe they are awash in orders and opportunities)

c. Teach them! Applies in India as well, but be more guarded as to the conditions under which you reveal processing techniques. There has to be a quid pro quo. Indian companies will very quickly use your skills to market themselves to your accounts, so be careful.

d. When you visit the plant, interact with lower level managers. Seek answers to your questions by first asking open-ended questions, and then a follow-up direct question for confirmation. Don't spend too much time training them. In India, hierarchy matters, so interact with Operations Manager / VP Operations etc, and allow them to delegate down.

e. Do not impose, or seek, penalties for late deliveries or rejected product. It won't matter in India as enforcement is impossible.

f. If possible, have a sourcing team based in India. Not to look over the supplier's shoulders, this just breeds antagonism, but rather to facilitate decision making and training.

3. Plant Selection / Approvals

a. Visit many plants. Take the time for more than one inspection.

b. Look to inspect the second/third shift. If you are a new customer, or have a smaller order, chances are you will be on the later shifts. Many plants employee 2nd-tier staff and labor then

c. Your Plant Manager should be in charge of the appraisal. I've had my customer's marketing department attempt to pass judgment on our plant and its processes. Complete lack of credibility.

d. Pay particular attention to the processes and staff at the plant. Not just the property and equipment.

e. Ask for third-party inspections from respected firms (Bureau Veritas, SGS etc.)

4. Raw materials

Standards for raw materials are critical. This is a frequent cause of product failures when sourcing from China / India. The vendor is forced to use sub-standard raw materials in order to meet shipping deadlines (with the global scarcity of raw materials, in general, there is scant time to wait for new raws).

a. Inspect raw material suppliers! (I spent 9 hours on a train to in-land China in order to inspect a glass supplier - glad I did as it spawned another business)

b. Ask as much of the raw materials as you would of your finished product. Plant certifications, management history etc.

c. Ask for samples of the raw materials that will be used in your production. Have counter-samples signed by all parties and retain a copy by each party (raw supplier, your vendor, you)

d. Ensure your vendor is as vested in raw materials knowledge and expertise as you are. From the Supply Chain manager to the QA Manager to Operations Manager, each of them should be able to tell good raws from bad.

e. QA personnel must be trained to set standards for all raw materials (from packaging to components), and must perform inspections of raws when they arrive at the plant

f. Their Supply Chain Manager has to be someone you are personally in contact with, and with whom you can (and are allowed to) communicate on supply strategies and issues

g. Establish a relationship where your vendor informs you of raw materials issues in order that you can jointly agree to either use the sub-standard raws, or delay product shipment and wait for new raws.

5. Product / Production:

a. Product definition: detail all the specifications for your product. Ideally your product specification should include everything from approved raw material suppliers to processing parameters to cmyk colors of packaging. The document should be signed by both parties, and in particular the QA and QC heads. Some say this risks giving away too much information - but I contend that you can't get what you ask for if you never actually ask for it.

b. Equipment

- Know the shortfalls of various equipment that can be used to make your product
- Educate your vendor on these shortfalls, and help them with work-arounds / compromises

c. Processes

- Know the shortfalls of various processes that can be used to make your product
- Educate your vendor on these shortfalls, and ensure they are not used in your production

d. Price: negotiate fairly from the basis of knowing what the likely manufacturing costs are. Do not low-ball in an attempt to garner higher margins - the days of that game are long gone in both India and China. At the same time, do not believe that higher prices will ensure better quality. Most factories have one set of suppliers, one set of processes, one set of staff -offering higher prices does not change any of that

6. Product Approval / Pre-Ship Inspection

a. Ask your in-country manager to pre-inspect each container, and/or find a third-party inspection service. You'll need to determine the sampling rates (pieces per lot code etc)

b. Ensure that vendor communicates to you any changes in staff, processes, equipment. Don't ask them to seek your approval - this will ensure they never tell you. Ask for the information and help them with any issues that arise.

c. A good vendor will have robust data recorded at every stage of the production process (for traceability and efficiency). Decide what parameters are critical for your product and design a standard Excel format that their QC personnel is to complete and send to you (or your sourcing manager) prior to container stuffing. Make sure it details each lot code.

- Confirm that they are packing exactly what is on the PO.

d. Pay attention to the container (clean, dry, no leaks/holes/rust) and container packing. Ensure: containers are packed on a dry-dock, properly squared and with adequate bracing, and if required with moisture/temperature control features

e. Take pictures of the container being stuffed: 1/3, 2/3, full, sealed (showing container # and seal). Develop a web-site where these pictures can be posted and reviewed. This helps eliminate using "it must have been during shipping" as an excuse for damaged goods.

7. Post Shipment Inspection / Issues

a. Agree with the vendor, ahead of time, how you will both deal with complaints. The purpose here is to have no surprises for anyone. An example

- For <=5 cases damaged in transit: issue L1Debit Memo and aggregate debits for once per month resolution. Also applies for short-shipments
- For <=20 cases damaged, I provide pictures and details of costs incurred. Issue L2Debit Memo, to be credited on next shipment or paid by end of month, which ever is first
- For >20 cases, file insurance claim, provide evidence of claim. Issue L3Debit Memo and collect asap. Reimburse upon settlement of insurance claim. If container has to be inspected by third-party, then agree that cost is to be borne by vendor if fault is found

b. Ensure you agree with vendor ahead of time that whether you buy FOB plant or C&F destination, if the issues are found to result from improper container stuffing, or product defects, the vendor will honor the claim.

c. Do all this even if you buy via Confirmed, Irrevocable L/C, because you are likely to need most of what is on the container and don't want to reject the entire order.

8. Documentary / Payment Control

a. If possible, structure payments to your vendor such that you pay them after you are paid by your customers

b. If it's a new relationship, bear the cost of a Confirmed, Irrevocable L/C, for at least the initial shipments

c. Never agree to pay-in-advance to secure shipments. Many Russian buyers do a lot of this, and in cash, but it's a game you should not play

d. In D/A cases, a lot of foreign companies factor receivables through the presenting bank, and then the docs will come to your bank. Of course, you can't stop them if they insist, but recognize that if they do, you won't be able to adjust claims against their invoice as it raises all kinds issues between the banks. Consider offering a small discount in order to receive documents directly (avoid all the bank notification charges) and then you can adjust small claims against their invoice.

With the current Economic Trends, outsourcing has become a survival mechanism for most small business. With higher fuel cost driving the cost of everything else up, it behooves the savvy contractor to seek outside Administrative help, with out all the traditional cost associated with the traditional "Secretary". A traditional Secretary is on the clock whether there is work to do or not, with a VA you pay for only the time necessary to complete the task. We have complied a few ways that a virtual assistant/bookkeeper can help your business thrive in a staggering economy.

Project Estimating: Your VA can do all the research on product/materials cost necessary for you to compile the project quote. Once you have all your numbers and notes in order your VA can compile them into your Project Quote ready for your approval. She can submit the bid for you and do routine follow up with the potential client to ensure your clients are not falling by the way side.

Project Scheduling: Once your Project Quote has been accepted by the client, you VA can handle the scheduling of the project. All the necessary materials and subcontractors can be contacted and schedule, so your project goes smoothing and efficiently, saving you both time and money.

Material Ordering: Your Va can keep up the materials order list and ensure that materials are delivered on time to prevent your workers from sitting on the job with nothing to assemble.

New Construction Projects: If you are a New Home Builder, your Va can research availability of land or lots for your construction projects. Dealing with a Real Estate Agent can be very time consuming. Even though you may give them detailed instructions as to the type of property you are looking for, most property information is not put in a nice package for your review. You must determine the area, what the market around the area is bearing, etc. Utilizing the VA for this can save you a lot of time and unnecessary distractions from your projects.

Email/Website: Your Va can maintain your website with up to date photos of current projects. Keep up with the incoming emails and organize the information in a manner that allows you the freedom of prioritizing the information so you decide which is more important and which you would like your VA to respond to for you.

Investors: Most contractors are also Real Estate Investors. Your Va can spear head your search of foreclosures, We Buy Houses campaigns, and Property Scouts. Once your criteria have been determined your VA can narrow down the properties you are most likely to be interested in and schedule your viewings of the properties.

Personal Assistant: Think of your VA as your personal assistant, she can be available to you when you need her, accomplish the task you don't have time for. And the best part of all you don't have to be out the expense of an office for her or office equipment.

Outsourcing generally has been a thorny issue. It has grabbed headlines, sparked off heated political debates and has been accused of costing Americans their jobs.

But one thing is for sure. One cannot wish it away in today's scenario. It's there and it is going to be around. So let's take a good look at how we can make best use of it.

There is no doubt outsourcing to BPO (business process outsourcing) companies has its merits. But it is not a panacea for all ills, and certainly not a magic wand for instant profitability. Remember, when you are handing over your crucial back end administration or customer care or accounting work to a firm outside the country, you have to be doubly sure the BPO company is trustworthy and will actually deliver.

Hence, before you decide to opt for outsourcing, it is essential to make a realistic assessment of why exactly you want it.

Let me put it simply. Do you want to outsource to cut costs? Or do you want to tap the talented and skilled manpower reserves existing outside of the US?

As the first essential step, you got to be very clear on the objective for outsourcing to a firm outside the country. Once you are focused on why you want to outsource, you will know for sure which company will best fulfill your requirements.

Now, its not enough to just seek out a BPO firm, hand over the work and sit back twiddling thumbs that the profits will come rolling in. They won't if you don't keep a hawk's eye watch on some crucial parameters such as quality controls, maintaining delivery schedules and the anti-social effect of time zones, especially in case of business-critical Managed IT services.

So how does one maintain quality and cut costs?

The answer lies in "business case realization". It is a proactive, continuous process which helps companies understand, measure and achieve predictable and sustainable business value. It lays down the frame work to realize the benefits anticipated from BPO initiatives.

Business case realization helps you to sharply focus your BPO initiatives towards benefits and also makes them flexible for any course corrections. But it cannot be done in patchwork. To make it show best results, you got to integrate it within your BPO initiative right from the word go. It should encompass multiple areas and disciplines within the initiative.

If integrated properly within the BPO framework, business case realization will save you from a "wait-and-watch" approach and give you a more "hands-on" approach towards monitoring the work process and the results.

Let me now take you through some of the aspects of business case realization which make this approach so successful.

Focused Outcome:

Business case realization lets you define the benefits of a BPO initiative in terms of the outcomes, associated measures and value. While developing business case realization, you must also give importance towards developing activities, resources, accountability and measures that will help you in reaching your targeted benefits.

This sounds somewhat similar to program management as it ensures a clear sight between BPO benefits and organizational imperatives.

Proactive Method:

Business case realization is essentially a proactive approach. It lets you anticipate the mistakes and the loopholes and helps you to control them before they can blow up into a crisis. It also helps in cutting down the costs as well as controls the risks by employing checkpoints and milestones to ensure quality within given timeframes.

To make the BPO initiative deliver the desired results, the key stakeholders of the outsourcing company such as the providers, management, employees and customers should ask themselves the following questions:

1. Is there a sense of shared accountability between the management of the outsourcing company and its BPO companies?

2. Is it just a service level agreement (SLA) for managed IT service or does the BPO company equally value the dependency of quality of our services and our objectives towards providing customer value with continued efficiency?

3. Do we take them merely as vendors or view them as partners? Do we try to integrate them in our organizational culture by sharing business critical knowledge with them?

Honest answers to these questions will help you decide whether your BPO initiative will be a success or not.

Here is the question: are you looking for temporary help or a permanent medical transcription supplier? The answer is; Yes. Say again? As it is often packaged, you have only two choices: 1) obtain temporary help to get you out of a transcription jam, or 2) obtain a permanent supplier to do all your work. But are these the only options? How about a better one, a middle ground? Permanently keep temporary help. Why? Advantages: Like a good Boy Scout or Girl Scout, with temporary help permanently on call, you are prepared for the inevitable.

Here are some things that are truly inevitable:

1) Your typists will get sick, and they won't give you a two-week notice when it happens. But you won't care if you have planned ahead.
2) They will have babies. How long are you prepared to wait till they can get back to work? Generally in a short day or two and you already have problems.
3) They will go on vacation. Even if you know the vacation is coming up, it won't help much; your work will get behind. But, with a built-in temporary staff, when they do, you won't even notice.
4) Your equipment will crash and you will need time to fix it. But when you plan ahead, your work will not suffer.
5) Does your typing staff know they can be replaced so easily? You know, when you think about it, that's not so bad!
6) And don't forget, company obligated SS payments, the company portion of the State and Federal Withholding, Medicare payments, paid sick days, paid vacations, equipment costs and space allocation are no longer your problem when you outsource.Disadvantages: There are disadvantages.

For instance, when work is skimpy in your office, the overflow service will still be looking for something to do even though you could cover it easily in-house. Also, when things go south and you have to send a glut of dictation out for transcription, the work may be turned a bit slower. After all, they aren't used to that much work every day. Conclusion: As is so often the case in life, the middle ground is the place likely to serve you best. Keep yourself in a position to do the unexpected overflow of dictation, quickly and without pain.

Keep a service "on staff." Give them a small amount of work daily with the understanding that they will be there for you when problems develop. And keep this point in mind, when they are needed to step up to the plate, they won't be wondering where the plate is. They will already know how you like things done: formatting, vocabulary usage, delivery of work. Everything will be in place to serve you smoothly. But remember this, if you are a stranger to them, the likelihood that they will feel obligated to get your donkey out of the ditch will be small indeed. And even if they did care-"Now how do you want this formatted again?"

You get the idea? It's painful to develop a working relationship from scratch-especially in a work glut. And this one extra point, when you need temporary help don't say to the service "we only need help until our girl gets back from vacation (or having a baby). Often you will hear "we don't do temp work." Why would they say that? Because it takes a great deal of time and effort to learn how you like your work done, how you want documents formatted, what vocabulary you tend to use and how develop that interaction with your office.

And just when it's beginning to get figured out-"we won't be using your service any longer." With that in mind, why would they do temp work?So make a deal with them; we have a temporary need but we plan on using your service permanently for all types of overflow. With that type of long term benefit, you will find many services willing to go the extra mile now-knowing that effort will have long term advantage later. Does maintaining a temporary service permanently make sense to you?

Consulting arrangements can do wonders for a business. They can provide a boost to your business by utilizing a consultant's focused expertise and their years of experience in similar venues, and they can give a business a good old-fashioned shot-in-the-arm.

Consultants are distanced from the daily politics of your business. They can provide you with unbiased opinions and fresh perspectives. The thing is, they can only do this if you allow them to do it.

I've done the consulting gig for years. In the process, I observed and experienced clients using my services well and not using my services well. I have listened to associates' stories of how clients work with them, too. Sometimes the clients get great value for their money, and sometimes they get less than that.

How to Make the Most of Your Consultant Dollar

Isn't the most important thing about working with a consultant that you get valuable results for your money and build a meaningful business relationship at the same time?

In order to do this, you must go into a relationship with your consultant with 'collaboration' in mind. The two of you must work together in order for the consulting relationship to work. As the client, you must be a willing participant in the business relationship with your consultant.

In order to get value for your consulting dollar, you must allow your consultant to learn and know about many aspects of your business.

If you go to a doctor with a pain in your side, but then refuse to let the doctor look at it and test it because you're too modest or afraid of what he will tell you, the doctor won't be able to help you.

Several years ago I consulted at a company to help them use software to create reports they needed. They did not want to show me their existing reports, however. How could I help them create the new reports if they refused to show me the existing reports? Like a patient who was afraid to show the doctor the pain in his side, this client was afraid to show me their reports. Two people at this client actually clutched the reports to themselves like patients holding their hospital robes closely.

After some explanations and coaxing from me, they finally let me see their pain and allowed me to help them. (Just for fun, I'll tell you that this company is an underwear manufacturer, and leave it at that!)

A consultant's role is to give you business information that you need in order to make informed decisions. They do not have the responsibility to make your business decisions, nor do they have the control. The responsibility and control (which go hand-in-hand) are yours.

Before You Decide to Work with a Consultant

First of all, know what you want. Define it before the consultant agrees to work with you. Write it down. List quantifiable and/or tangible objectives. Write out what you think you want the consultant to do.

* What goals do you want to accomplish?
* What is the scope of work?
* What results do you want the consultant (and your business) to achieve?
* What do you think is the timeframe?
* What is your budget for this project?

As You and the Consultant Agree to Work Together

Discuss how the consultant works. For example, what methodology does she use to gather information, process it, draw conclusions, and make recommendations? There is no magic answer to this question. Most consultants, over time, will develop their own methodology to perform their work. Just make certain they have a plan that is the basis for their methods.

State the scope of work: what the consultant will deliver, when they will deliver it, and how they will deliver it.

State who will do the work (if there is a team of consultants). Also state where the consultant(s) will perform the work.

Agree on the timeframe, money, and invoicing.

List points of time at which you and the consultant will touch base to discuss where the project is at, how it is coming along, and if adjustments need to be made. It's a good idea to schedule regular meetings or conference calls so that issues do not become surprises.

What Else to Look For?

"The worst consultants believe their companies are smarter than their clients, instead of recognizing that they're extensions of their clients' resources. Junior consultants in several well-known firms especially show this trait; it's part of their firms' core cultures," writes Peter Keen of Computerworld. He continues, "Arrogant cultures make lousy partners and are in the rip-off business without realizing it. Because they believe they're so much smarter, they make many mistakes that the more collaborative and respectful consulting firms don't make."

Look for consultants who want to form a collaborative effort with you and your business. Likewise, you must collaborate with the consultant in order to get the most bang for your buck.

Two More Do's and Don't's

Treat consultants as consultants, not as employees.

If you treat consultants as insiders rather than as outsiders, you will not receive the benefits of having them work with you. This is more of a mind process for you as the client. If you think of your consultants as an extension of your employee base, you may not be able to hear them when they tell you important information. Remember, as outsiders they are able to skip most of the politics and inefficiencies of your company in order to unearth diamonds in the rough. These are the hidden diamonds you are paying them to find. If you treat them as if they are employees, you will hinder that creative process for which you are paying them.

Treat consultants as adults.

Believe it or not, sometimes clients treat consultants as if they were children. This happens most often when consultants are told to not contact certain people for information, even though the contact and the information is important for the consultant's work. I've also heard about consultants being scolded as if they were children.

On the surface, the reason that consultants should not be treated like children is obvious; no one wants to be treated like that. It's humiliating. The deeper reasons are the same as for not treating consultants like employees: clients who treat their consultants like children will not get the benefits out of the consultant that they are paying for.

Outsourcing is the process of paying someone (a freelancer) to take on a project, or part of a project for you. It's a bit like having a temporary employee, but without the administration and legal headaches, and it means you can leverage other people's time and massively increase your productivity.

The work could be writing a report or article, creating a website, programming or script writing, graphic design, market research or any number of other tasks. The two things that typically put people off outsourcing for the first time are the cost, and the difficulty of finding the right freelancer and setting up the transaction. In truth however, the cost can be very low, and hiring a freelancer can be very simple if you follow some simple guidelines. Here are 7 tips to make sure your first attempts at outsourcing are cost effective and painless :

1. Plan your project

There's a famous saying: failing to plan is planning to fail. The person you hire might be great at what they do, but they will only work within the specifications you give them. Be clear about what you want and you'll find your outsourcee more likely to deliver.

2. Be specific

The more detailed you can be about your project, the better chance you'll end up with what you want. For an e-book or report give a synopsis, chapter headings, a short brief for each chapter and a suggested length for each section. If you can also give a sample of writing style that will help ensure the end product is up to your standards. Examples of resources (books, websites etc.) to conduct research is also a good idea - the person you hire might be a great writer, but that doesn't mean they are an expert on the topic you're asking them to write about.

3. Research your freelancer

Most outsourcing sites (getafreelancer.com, elance etc.) have some kind of feedback system. However, it's also a best to look at a samples of previous work. Discuss the project with your bidder before rushing in to a decision, especially on bigger projects.

4. Define your rights

You need to be clear about who gets the rights to the work. To avoid any potential legal problems in the future, use a written contract which grants you full rights to the work, and preventing the person you hire from reselling or reusing it.

5. Use multiple freelancers

A great way of saving money on bigger projects is by having the work done by multiple people. Having a book ghost written by a native English speaker may cost a fair amount, but you could have it written considerably cheaper by a freelancer in a developing country . You can then have it edited by a native English speaker at a fraction of the price of having them write the book.

6. Agree a payment schedule

For big projects set up multiple payments by escrow in advance. You can release the payments as the project develops. For example, make a payment after they deliver the first chapter, another when half done and the final payment on completion of the project. This will help to create trust between you and the freelancer and allows you to monitor the project. You can then spot potential errors early on and have them fixed before too much time has been invested into the project.

7. Start off small

Giving up control of a project can be difficult for many entrepreneurs. Try starting with a small, non-essential project to break yourself into freelancing without too much pressure. Learn from your experience and try out the freelancer you're hiring. If they do a great job you'll feel more comfortable delegating a larger project in the future.

There are only 24 hours in every day, no matter how hard you work. If you want to increase your productivity you may have to give up a little control and delegate by outsourcing some of your tasks. Start small, test the water, follow the tips above and watch your productivity soar!