Out-sourcing rediscovered: Purchasing parts and even complete vehicles from independent suppliers can keep costs down and quality up

The British bands played “The world turned upside down” at the Yorktown surrender, and the lyrics of that song, if not the music, today strike a sympathetic chord in Detroit. The Big Three automakers´ world has been turned upside down by global competition, and now they are fighting back. General Motors, Ford, and Chrysler have all adopted many of their competitors´ practices. One of the key manufacturing techniques they have taken on is out-sourcing — purchasing parts, components, and even entire vehicles from outside suppliers. This is supplanting the traditional vertical integration, where parts are manufactured in-house.