Flexible companies change to stay put (Made in America)

The Washington Times ^ | 4-11-06 | Jeffrey Sparshott

[HamiltonJay]

I have never, ever seen a successful offshoring myself... every time the commincation, hours, management, eat it alive, the end product cost far more than predicted and quality of it is second tier at best.

Most companies would be better off just shopping around the US, there are pleanty of cheaper markets in the US with pleanty of talent, that can meet or beat offshoring bids, and actually speak english as a first language.

[vikzilla]

Most companies would be better off just shopping around the US, there are pleanty of cheaper markets in the US with pleanty of talent, that can meet or beat offshoring bids, and actually speak english as a first language.

You are so right.

There are small towns all over this country with good American workers that would love a chance to raise a family and stay in the town they grew up in.

[RipSawyer]

Btw, I specialize in Manufacturing Operational Metrics and Analysis.

Could you come down here where I live and explain to a few idiot managers that hourly labor rate and unit labor cost do not automatically go up or down together in lockstep?

[madconservative]

As long as they are comfortable with my hourly labor rate :)

Seriously though, make them all read "The Goal" (highly recommend it) or anything on Toyota Production System.

Outsourcing is a knee-jerk and inadequate solution for US manufacturing. Oftentimes when it does save money for the company, it is only because the Chinese company is better capitalized with new equipment that costs the same to them as it does to us. Had the U.S. textile industry (where labor is something like 5-10% of the total cost of the product) simply kept up with technology, fabrics would still be made here. Instead they made textiles on 50 year old technology and were surprised when China could make it more economically - using state of the art U.S. technology!

Here is the catch 22:

It is strategically a bad idea to share design with outside firms for outsourcing. This is because the firm will learn the technology and eventually go direct to consumer. Or they will offer their manufacturing services to your competitors. At the very least they will make a profit that could have been yours. In addition, on proprietary technology there is no greater opportunity for exploiting "economies of scale" in component ordering by them than there is for you.

This leaves only commodities as candidates for outsourcing. However, many commodities are capital intensive, NOT labor intensive, so they usually won't make up the organizational inefficiency of two companies where there should be one, the huge increases in stateside inventories, and huge logistics costs.

My company is insourcing more and more component manufacturing! And we are making a higher margin % than in any time in our 100 year history.

[RipSawyer]

Seriously though, make them all read "The Goal" (highly recommend it) or anything on Toyota Production System.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If I was in a position to make them do anything I would make them go and look for another job.

I figure you are probably very good at your job for the following reasons:

1. Everything you wrote is easy to read and understand, communication is apparently the rarest and most sought after talent on the market now.

2. Everything you wrote sounds like mainly the sort of common sense that anyone who knows anything about business should understand but few do.

[madconservative]

Thanks for the compliment.

I assure you that the idiots' education is forthcoming one way or the other.

[-=[_Super_Secret_Agent_]=-]

I read the "Toyota Way" and the author said most US companies only go for the "waste" part. TPS is a complete system.

[madconservative]

In my experience, most US companies don't even do the waste correctly. The problem is that in America we adopt nomenclature, charts, graphs, "processes", and professional certifications, but then just execute using the old method. Perhaps it is because of our educational system, which focuses more on advancement against criteria than actual learning. It is as if most U.S. companies are incapable of learning. That is why Toyota is so open in their system. GM and Ford will plagiarize the terminology all day, change their organizations to look the same as Toyota, and get everyone through Lean training to get cute certificates, but they will all just do the actual work the same way they always did.