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Saturday, November 24, 2007

VAR virtual manufacturing network


Does outsourcing create opportunities for Value-Added Resellers (VARs), retailers and independent contractors (ICs)? What outsourcing leaves behind is a vacant facility, unemployed workers, VARs, and. . .customers. Essential components and players toward startup of a manufacturing facility. Conventional wisdom dictates workers re-deploy to other employers or enter new industries. Resellers and retailers may opt to continue with the overseas manufacturer or work with domestic suppliers to fill their system and component requirements.

A wealth of resources

However, unconventional wisdom sees a wealth of resources outsourced companies leave behind. These resources consist of the Knowledge, Skills and Experience (KSE) workers acquire and accumulate over their years of employment. These resources are overlooked by those who once depended on that company, namely, workers and retailers. Something else that is much overlooked: The difference between a name-brand computer or server at any major electronics retailer and one at an independent VAR? Other than price and location: None. What if VARs and resellers leveraged their experience with suppliers where they themselves took on the role of supplier for these ICs? What if these ICs could extend a VARs sales, service and support market reach through a VAR manufacturing network?

VAR virtual manufacturing

That is, the individual who supports the assembly process of a system on the production floor as an employee builds the same, at home, as an IC with a wealth of KSE, an entreprenuer, for VARs and retailers. These individuals may include non and certified computer technicians, software and electrical engineers, hobbyists and others. It's their choice to make whether to focus on service (build) or support (installation) or both. Effectively, VARs become suppliers to their own manufacturing force, independent contractors, not employees. These ICs represent a VAR virtual manufacturing facility.


An area of opportunity between ICs and VARs that is quite common with other areas involving ICs is compensation. It stems from a mutual tendency to mis-apply employer/employee compensation structures. Assuming, for the moment, a fair compensation of ICs by VARs. It's been said individuals with vast KSE resources would not be content or satisfied with nothing less than a hefty fee for their services. Right. So, don't go there. There are, on the other hand, more than a few people who would not pass on the opportunity to create a constant source of income as ICs, at their own pace, in their own home.


A vital difference between actual versus virtual manufacturing is the virtual can be expanded endlessly through networks. Networks may start locally, but they can expand regionally, state and nationwide. They generate income for network members, both, Independent Contractors and VARs. The opportunity exists for VARs and mom & pop businesses to network the wealth of KSE resources in the tech community left behind by the corporate practice of outsourcing.

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