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8 comments

Outsourcing on the Way Out?

Posted September 05, 2009 8:11 AM

More U.S. manufacturers are now turned away from off-shoring and moving operations back home, notes American Machinist. The magazine cites a new AMR Research study showing that the risk of sourcing and manufacturing in China is increasing as a result of intellectual property infringement, quality failures, and regulatory compliance issues. The value of the dollar also has dropped more than 30% vs major world currencies since 2002, making American exports cheaper, while transportation costs and foreign wages have climbed significantly. What's happening at your firm? Are quality concerns — and other factors — making foreign operations less appealing?

The preceding article is a "sneak peek" from Quality Control, a newsletter from GlobalSpec. To stay up-to-date and informed on industry trends, products, and technologies, subscribe to Quality Control today.


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Guru
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#1

Re: Outsourcing on the Way Out?

09/05/2009 11:32 PM

A ray of sunshine

told you so

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#2
In reply to #1

Re: Outsourcing on the Way Out?

09/06/2009 12:42 AM

Agreed!

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#3

Re: Outsourcing on the Way Out?

09/06/2009 3:58 AM

What goes around, comes around...
Didn't we all know that?
Del

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#4

Re: Outsourcing on the Way Out?

09/06/2009 7:21 PM

IMHO, There's always going to be sufficient justification $$ for some outsourcing..... in some industries.....but the madness that we've all experienced over the last 6 to 8 years was most likely driven by short term - get rick quick decisions. These strokes of genius were probably made buy people who are now retired with there millions or in a tenured-ish "sacred cow" like VP position until they croak.

Scenario: Your in the board room and Joe the back stabber wants to present an idea.

Joe:

"OK, here's the idea to get rich, we'll provide a complete stranger - in a foreign land with our blue prints, cad models, manufacturing process (that took years to prefect) as well as a detailed list of our customer base and we'll get them to sign a contract that is impossible to enforce........ because they'll work for 10 cents on the dollar."

The funny thing is....is that it passes because the rest are in get rich quick/screw the next guy mode too. Now for the good part, stopping out sourcing is like stopping doing business with the mob, they cut you out of it but they continue to conduct business as usual making your product, with your process and probably with.. your equipment.

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#5

Re: Outsourcing on the Way Out?

09/07/2009 4:40 PM

Good news... sort of. Now that mfg. and skilled labor jobs have been reduced and wages depressed, sure, bring them back. The shift of the Western standard of living was bound to happen once having to compete with global (cheap) labor happened. It could have been planned/orchestrated better to ease the pain. Things will never be as they were before, though. The cat is out of the bag.

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#6
In reply to #5

Re: Outsourcing on the Way Out?

09/07/2009 5:08 PM

The cat is out of the bag.
I deny any involvement with that bag...it wasn't me in there...
Del

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#7

Re: Outsourcing on the Way Out?

09/08/2009 8:29 AM

The leadership of my company made a decision over a year ago to look at total product cost, risk, etc. when considering outsourcing. However, no one told purchasing. One of their primary measurables is still to increase the number of components purchased in LCCs from 35% to 50% (billions of dollars). We frequently save a penny on the part and spend a nickel on increased transportation and quality costs.

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#8

Re: Outsourcing on the Way Out?

09/08/2009 10:28 AM

Just wait. In 70 years even the Chinese will be grumbling about the cheap/garbage products coming out of Africa.

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