“We didn’t need to communicate that often,” Owen says.
Assyst was a tight knit group where everyone knew what everyone else was doing. If the in-house programmers had a problem, they would walk down the hall and work with their peers to formulate a solution. Managing the outsourcing relationship also helped Assyst managed itself better. That was our first mistake.” Thereafter, Assyst assigned its best managers to oversee the outsourcing projects. “We assumed since we were paying them lower salaries we could give them second best.
“We learned we weren’t managing people too well,” reports Owen. Because every person at Assyst was extremely busy, no one paid much attention to the outsourcers. This turned out to be a good idea because the transition to outsourcing was far from seamless. A group of patterns represents a complete garment using DFX allows one CAD vendor to design the patterns and another CAD vendor to manufacture the clothing. DFX allows 2D CAD vendors to exchange patterns among themselves. Assyst needed an outsourcer to adopt foreign CAD programs to the Data Exchange Format (DFX) of the American Apparel Manufacturers Association, an industry standard format. The first project was a reverse engineering assignment. He wanted the basics firmly in place before the tougher assignments began. Moreover, Assyst felt the first projects needed to be simple so the two partners could stitch together a working pattern. Three years went by before Assyst assigned a core project to WOC. “We had to build up confidence and trust,” he says. Owen says at the outset his company was “very nervous” about sharing its intellectual property with a third party. WOC is located in Bratislava, which is 40 kilometers from Vienna, Austria. WOC was familiar with the apparel industry and was staffed with young, eager programmers who spoke both German and English. So, Assyst turned to the West-Ost (East) Connection (WOC), an outsourcing firm in Slovakia. In addition, Owen says eastern Europeans are known for their reverse engineering skills. “Slovakians are much harder working,” Owen observes. For example, Germans have many long national holidays. “European labor policies are not advantageous to business,” notes Owen. Second, the work rules are different in western Europe. And their level of qualification is very high, adds Owen. A Slovakian programmer earns 2,000 DM a month, a figure which includes management and infrastructure overhead. A talented programmer in Munich would typically earn 8,000 DM a month. “We could hire four guys in Slovakia for one person in Europe,” reports Owen. Moreover, Assyst did not want to hire local programmers.
A new software developer needs more than two years to learn the intricacies of the apparel industry, according to Ian Owen, Assyst’s former chief technology manager. This search was like looking for a needle in a haystack because the apparel industry is so specialized. It began looking for an outsourcing supplier with knowledge of the apparel industry. In 1994 the company, growing quickly, decided to outsource its CAD programming. Munich trails London, England in the number of European high tech start up companies. The Brits chose to locate their company in Munich, Germany because of the thriving high tech environment there. Customers include Levi Strauss, Boss and Maxmaura. Half its employees are apparel engineers who are expert tailors. British programmers formed the company in 1985 to write two dimensional CAD software for the apparel industry. That was the learning lessons for Assyst GmbH. How do you fashion an outsourcing relationship that works? The suppliers’ formative years were spent in Communist eastern Europe. The customer’s management grew up in capitalist western Europe. But from a business standpoint, they couldn’t be farther apart. The buyer and the supplier are just five hours apart by car.