OUTSOURCING IS MORE THAN A SHORT-TERM COST CUTTING MEASURE. IT IS A STRATEGIC BUSINESS DECISION TO PARTNER WITH A SERVICE PROVIDER. THIS MANAGEMENT-ORIENTED PAPER DISCUSSES SOME CONSIDERATIONS FOR MANUFACTURERS WHEN MAKING A BUSINESS DECISION TO OUTSOURCE. IT EXAMINES WHY MANUFACTURERS OUTSOURCE INCLUDING COST SAVINGS, GAINING COMPETITIVE ADVANTAGE, COST EFFECTIVELY ADOPTING NEW TECHNOLOGIES, AND THE IMPACT OF A GROWING SHORTAGE OF SKILLED PERSONNEL. IT CONCLUDES WITH EXAMPLES OF MODULAR OUTSOURCING IMPLEMENTATIONS AT SEVERAL MANUFACTURING COMPANIES.