Leveraging Local-Global Delivery Model to Optimize Value

According to a survey conducted by KPMG, 41 percent of the 76 Aerospace and Defense (A&D) senior executives say growth is of extremely high priority. However, they also indicate that cost and performance management is a big concern. According to Doug Gates, KPMG International Global Chair, Industrial Manufacturing and Global Lead, A&D, “A&D organizations will need to think about how they drive profitable growth in new segments while simultaneously managing costs within slower-growth segments. Executives are going to need to stretch their organizations outside of their comfort zone to explore new approaches and team up with new partners that can help to rapidly and cost-effectively exploit these emerging opportunities.”¹

Adopting a local-global delivery model can help these organizations carry out cost-effective Engineering Design Processes, Prototyping and Testing, Supply Chain Management, and Post Product Introduction Support while creating value at the same time. A local-global model distributes the delivery execution between two teams located in different geographies and time zones. The local team is closer to the client and understands their needs, communication and cultural nuances of that particular geographic location. Due to the team’s local experience and competency, their response is immediate and more apt. The team has the right mix of knowledge, engineering skills, and customer understanding. The requirement is then adequately communicated to the global team, which is easily scalable, has a large pool of talent with diverse capabilities, and has cost advantage without compromising on the quality.

By keeping the technical interface and program management near-site and conducting execution offshore, the local-global model ensures the right balance of capability and capacity. The following chart gives an idea into how the model works in the case of a new product introduction (NPI) cycle.

Source: QuEST Engineering Value Chain

Some of the unique benefits of a local-global delivery model includes:

• Minimized time-to-delivery, cost, waste, and inventory
• Maximized performance, cost and compliance
• Maximized efficiency, productivity, and quality
• Maximized service-level and value added services, compliance ²
• Low drag on customer’s managers
• More complex packages can be “offshored”
• Capable capacity at low effective bill rates

At QuEST, we have implemented this model for three of our five largest customers. We have deployed high proficiency resources that are local to our customers. The onsite coordinators act as technical and program interface and responsible for quality assurance. Our scalable India team executes projects at low cost while adhering to the customer’s standards and processes. Everything is duly checked and approved by technical specialists before delivery. QuEST coordinates the entire workflow and manages all resources to ensure quality output, while you focus on your core work. For a project that requires ramping up engineers’ strength to 150 FTE, QuEST has successfully offered 60 percent cost savings through this model.

To know more about how your organization can benefit from QuEST’s local-global delivery model, contact us.

Author: Steven Nelson

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