Quality Control

As we have come to expect from you, a well-thought, well-presented analysis! Rated a GA vote from me.

Still, the more jobs that go "away" to wherever isn't "here", the fewer paychecks there are to purchase goods at any price, no matter how cheap (inexpensive) they are to produce. That seems to be the sticking point. Quality control is also a great issue - if you have to replace something too frequently, how much "cheaper" is it, really? Plus, the net profits reside with the corporate HQ location, and if that's "there" too, then the total economic loss is magnified.

Has the steam gone out of outsourcing?

I certainly hope so. Outsourcing was just a means (and a particularly dumb one at that) for managers to try to control engineering labor costs. I hope the engineering community punishes this nonsence from management. Most engineers refuse to realize that they are considered to be just another commodity. I have observed this situation for close to 40 years and I am baffled why engineers did not unionize long ago.

Because as salaried technical hired hands, we've always been considered part of management. Curious, but there it is.

.................Is Outsourcing on the Way Out?

NO........ Unfortunately I do not believe outsourcing will ever go away because of human nature.

• The shareholders will always want more profit because they are ignorant to what they are actually doing.(biting the hand that feeds them)
  
• The business structures (The Accounting and Management combo AKA: The Evil Empire) call for cost savings even when there are none .......that is unless they let us actually spend some money which will actually save much more money. Even the cook at your local diner knows you have to crack eggs to make omelets. (2 eggs @ .10¢ = $2.00 return) but try to tell that to someone who's bonus is driven in-part by what they don't spend.
• The workers have become lazy (at least in the U.S.) and have lost anything resembling the work ethics that once made us great. Some workers actually view a manufacturing company as a cash cow like the welfare system or like the military where you actually get paid to show up and spend time running from work or pointing the finger.
  

History shows cyclical trends that will probably have the outsourcing boom cut way back as we get more efficient out of necessity to retain our jobs, intellectual property and designs / systems........ not to do what is right the first time which is what we should have done .....the first time. If we did that then accounting wouldn't have looked elsewhere to start with......but the worms in management probably would have .

Toomuchfun here, pleased to comment regarding outsourcing!

I have personally considered both sides of the outsourcing issue as fairly as I believe that I can. I understand the profit motive well, as in my field of expertise, outsourcing much of the work to subcontractors is always a better way to accomplish the end result. I am a product of the General Building Construction Industry.

However I have also been the victim of the results of outsourcing of collection of invoices due for payment, attempts to correct problems with things such as cable, or satilite TV problems, and other issues too many to waste print here! I find that the outsourcing of the work for solving the issues of the every day problems must be ended, and these employment opportunities must be returned to this nation. I personally refuse to speak to, or even try to communicate with folks living in other countries, about resolving my day to day issues. Too many times I have had to repeat the problems to multiple individuals who could not resolve the matter and must then refer me to a higher party who finally transfered my call to someone stateside, where my issue should have been addressed from the outset.

When ever possible, I avoid doing business with companies that outsource their trouble shooting issues to other nations.

Toomuchfun

Don't you just love it when you get some sales rep or tech support person on the phone who sounds like they have a mouth full of rubber bands and lock washers?

Has the steam gone out of outsourcing?

I do not agree, There are so many outsource projects are coming to India. There are companies like http://www.cleaveglobal.com cater's in all kind of outsourcing. For ex- Collections, Health Care, Finance,Data Entry to name few.

Outsourcing is not dead only moved to a dormant stage. The cost of doing business model has changed. The once low cost areas are now not so low cost as they learned that they can demand more for their knowledge. Thus the shift from India to Asia, South America and some shift to the US... the current rush to produce fuel has starved the market for knowledgeable engineers and even managers. When the market was slower the need for engineers made it an employers market. As the demand to build new facilities grew the selection pool shrank thus creating a void and a market for engineering skills. but when there are decades of business controlled markets the people that would choose this as a means of a career are reduced. There is a large void in the 0 to 10 year engineer pool and it would take a few years of high demands for engineering to increase the pool of new recruits into engineering... This is where I see that the big business mindsets fall short in considering the big picture and planning ahead in developing new talent. Trying to appease share holders can only last a limited amount of time before the real cost of doing business catches up... one might wonder if we will learn from this.... I have a feeling it will be part of the lack of hindsight that is part of the upper management succession criteria...

There'll be Hell to pay if the hindsight is as lacking as the foresight! Always true, though, that there are none so blind as those who will not see...

Is Outsourcing on the Way Out?

I have personally consider both side of outsourcing issues.

if talk about disadvantage :

1.Loss of managerial control, because it is more difficult to manage outside service providers than managing one's own employees working possibly in the same building.

2.Often the hidden costs are difficult to calculate or prepare for.

3. Another disadvantage of outsourcing can be a threat to security and confidentiality.

& about advantage :

1.we take advantage of the cost-advantage :

2.Save big !

One of the benefits of outsourcing is that you can save on every aspect of your business and increase your profits.

3.Get access to specialized services

4.concentrate more on your core business

5. benefite from time zone advantage

Its my personal view that outsourcing is good in some fields.

Best regards,

Shreya

www.theoutsourcingblog.com

Mostly I agree with your reply, but I would like to comment on some details:

Disadvantage 1) I do agree that it is more difficult to manage outside service providers - BUT this can be adressed with very little effort. Ex.

- Weekly reporting

- Onsite project managers

to name a few options.

Disadvantages 2) There aew hidden costs even without outsourcing, the big question here is how much experience you have with the field. For first timers, this is true - but once you have run 2 or more outsourcing projects there are little to none hidden costs.

Best regards

Jimmy Borch

CTO

DanAsian

http://www.danasian.dk

The Offshore Group (www.offshoregroup.com) offers turnkey services that enable manufacturers to set up and maintain manufacturing operations in Mexico at low-cost and low risk, while having full control over their core competencies. www.offshoregroup.com