Manufacturing Outsourcing To Be The Next Big Wave: Klein

New Delhi: | Updated: Nov 26 2003, 05:30am hrs
This might add on to the worries in the US over outsourcing. AT Kearney chief executive officer (CEO) Henner Klein has defined manufacturing outsourcing as the next big wave after IT software services outsourcing and business process outsourcing (BPO) services.

India is very much on the radar for manufacturing outsourcing, Mr Klein, the sixth CEO of the global management consulting firm told The Financial Express.

Henner Klein
The nineties have been a decade for IT outsourcing followed by BPO (that has accelerated in the last two to three years). The next big wave in outsourcing will be manufacturing outsourcing, Mr Klein said on the sidelines of the World Economic Forum 2003.

With not many success stories here outside of the auto components sector, Mr Klein still believes that India will be a strong contender for handling outsourced manufacturing along with China and Eastern Europe.

In his view, the strong potential areas in Indian manufacturing industry for bagging outsourced work are manufacturing of engineered goods, component manufacturing for the automobile industry and low-technology hardware.

Importantly, Mr Klein warned that Indian industry should not over-emphasise on the services sector. Instead, it should concentrate on manufacturing, he advised. The outsourcing of manufacturing activities might lead to a strong manufacturing base in India, which was absent otherwise, he said.

Mr Klein, who was named leader of AT Kearneys Northern Europe profit centre in 2001 and was elected to the AT Kearney board in 2003, takes over the firms top job on December 1.

Incidentally, Mr Klein was part of the AT Kearney team that assisted Jack Smith in his outsourcing drive for General Motors. This input created the building blocks for Ignaccio Lopezs oft-quoted and furious undercutting of component costs for General Motors, before Mr Lopez and a select team made their stormy exit from the company.

Mr Klein served previously as unit leader for the firms Benelux region and co-leader of the European manufacturing and supply chain practice. He has to manage Kearneys continuing integration problems with parent EDS.