Is Outsourcing's Pendulum Coming Back?

It does no good to manufacture goods overseas to any country. If the cost of shipping them to the US for distribution increase the cost to the consumer beyond what they would cost if made domestically

The prime reason was to keep the cost low but with the ever increasing rise in oil prices. The transportcosts will overshadow the low production cost winnings.

Also, these developing countries have started increasing wages and standards of living reducing much of the cost savings.

Manufacturing does seem to be coming back to the U.S., but it probably has little do do with the patriotism of the manufacturers building the new plants. Most likely it has more to do with a number of factors that have little to do with what is right for the country and much more to do with where the most potential for financial gain lies.

One obvious observation is the fact that fuel prices are rising and will continue to rise at rates higher than inflation for the forseeable future. Therefore shipping costs are going up which makes a price comparison of cost to ship 6000 miles versus cost to ship 1000 miles lean towards local manufacturing.

Another possible stimulus for the change is the concept of "Lean Manufacturing." The Lean Manufacturing philosophy suggests that a company should only produce two or three days worth of product at one time and not replenish this supply untill the on-hand product is sold in order to reduce waste. The article in your "may be declining" link talks about the impracticallity of filling a shipping container with large, light-weight objects. This is obviously true, and it is also impractical for a company that is pursuing the Lean Manufacturing philosophy to try to negotiate contracts to fill ships with relatively low-volume small items and demand daily trips so the company doesn't have to pay for ware housing.

I hope the difficulty of maintaining quality standards from 10,000 mi away from the point of manufactur has something to do with this. The recent problems with Chinese products are just the most egregious examples. When you can't go to the plant in an afternoon, you really don't know what they are doing.

History repeats self everytime. Outsourcing was initiated by the same bunch responsible for devicing like practices in Wall Street.

Outsourcing was implemented by the same bunch lacking respect for accountabilty(make a bunch of $ and make someone else responsible for the problems).

Outsourcing is supported by the same bunch who DO NOT understand the simple concept of Supply and Demand.

Thank your fine MBA scholars from Harvard, MIT and others for todays reality:

Outsourcing is at the top of my list of reasons for our inability to design, manufacture, service what "we used to make ?".Wonder why the US does not have a top notch GNP? or why the vast majority of our professors are out of touch with technical realities? Or why it is that Virtual Engineering Design Packages deliver flawed simulation results? , or, or , or.

I am sure many will agree that there is a very good connection between outsourcing and the global financial crisis.

My apologies for coming across with an attitude. I just happen to be an engineer who has lost many jobs , designs,products, patents, processes ; in part, because of the never ending Outsourcing. All of it despite of making my professional rates better than ALL my overseas competitors.

Best regards to all.

ps : no spellchek done to this message

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