For Some U.S. Companies, Time to Head Home March 29, 2012
Posted by Jeff Fuchs in supply chain, Uncategorized.Tags: offshoring, outsourcing
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In an article at Bloomberg Businessweek, Matthew Phillips writes about a developing trend of U.S. companies that are returning their operations home. A panoply of issues face those companies which seek to outsource, such as separating physical production from engineering, cost of travel in terms of money and time, and globalized supply chains. For many companies the cost of all of these factors is too much. 21% of U.S. companies sourcing in China are now considering shifting back to the United States.
To read Matthew’s article, head on over here.
The Case for Onshoring January 30, 2012
Posted by Jeff Fuchs in supply chain.Tags: offshoring, outsourcing, supply chain
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Guy Morgan, writing at IndustryWeek, makes a compelling argument for onshoring. Morgan contends that clear thinking is important as U.S. companies move forward. They must consider the total costs of making a product. Logistics matter. As wages and labor costs rise in other countries, the United States is prepared to meet the change with highly sophisticated yet easy logistical systems for those seeking to work within the country.
Read Mr. Morgan’s persuasive article here.
The Case for Onshoring January 30, 2012
Posted by Jeff Fuchs in supply chain.Tags: offshoring, outsourcing, supply chain
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Guy Morgan, writing at IndustryWeek, makes a compelling argument for onshoring. Morgan contends that clear thinking is important as U.S. companies move forward. They must consider the total costs of making a product. Logistics matter. As wages and labor costs rise in other countries, the United States is prepared to meet the change with highly sophisticated yet easy logistical systems for those seeking to work within the country.
Read Mr. Morgan’s persuasive article here.
787 Dreamliner Teaches Boeing Costly Lesson on Outsourcing April 20, 2011
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, outsourcing, supply chain
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The Los Angeles Times reports that Boeing, which outsourced labor and material around the world, is losing money on the 787 Dreamliner. The plan was to use one factory near Seattle to gather together the parts produced around the world, and assemble them. But early on, problems emerged –from parts that didn’t fit to shortages of parts altogether. Because of this, the airliner is 3 years late and almost one billion dollars over budget.
Check out the L.A. Times article here.
787 Dreamliner Teaches Boeing Costly Lesson on Outsourcing April 20, 2011
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, outsourcing, supply chain
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The Los Angeles Times reports that Boeing, which outsourced labor and material around the world, is losing money on the 787 Dreamliner. The plan was to use one factory near Seattle to gather together the parts produced around the world, and assemble them. But early on, problems emerged –from parts that didn’t fit to shortages of parts altogether. Because of this, the airliner is 3 years late and almost one billion dollars over budget.
Check out the L.A. Times article here.
CFOs Say Offshore Outsourcing to Decline March 10, 2009
Posted by Jeff Fuchs in economy, supply chain.Tags: economy, offshoring, supply chain
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In a new survey, chief financial officers at leading U.S. technology businesses say they’re more likely to consider the U.S. as an outsourcing destination for services and manufacturing over China and India in 2009. Already, it appears that technology companies have started to pull back, according to the BDO Seidman 2009 Technology Outlook Survey, an annual survey of CFOs conducted in January. Only 42% of the 100 CFOs surveyed said they have operations outside the U.S., compared to 79% last year.
Read the full article here.
CFOs Say Offshore Outsourcing to Decline March 10, 2009
Posted by Jeff Fuchs in economy, supply chain.Tags: economy, offshoring, supply chain
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In a new survey, chief financial officers at leading U.S. technology businesses say they’re more likely to consider the U.S. as an outsourcing destination for services and manufacturing over China and India in 2009. Already, it appears that technology companies have started to pull back, according to the BDO Seidman 2009 Technology Outlook Survey, an annual survey of CFOs conducted in January. Only 42% of the 100 CFOs surveyed said they have operations outside the U.S., compared to 79% last year.
Read the full article here.
Foreign Sourcing of Production February 9, 2009
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, supply chain
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Increasingly in recent years, American manufacturers have looked abroad for the manufacturing of goods to be distributed in the U.S. or for parts to be used in goods to be assembled in the United States, and the recent turmoil in international currency and financial markets is not likely to change the trend. There is nothing new about manufacturers outsourcing part or all of the manufacturing process, however, given the increasing tendency to outsource all or part of the manufacturing process, there are some twists and turns which American companies should be aware of when sourcing from foreign countries.
The article applies generically in some cases to companies’ supply chain issues anywhere, but is tuned to highlight concerns for companies considering offshore production.
Taking production offshore is frought with hidden costs. This article does a good job of underscoring many of them. Read it here.
Foreign Sourcing of Production February 9, 2009
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, supply chain
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Increasingly in recent years, American manufacturers have looked abroad for the manufacturing of goods to be distributed in the U.S. or for parts to be used in goods to be assembled in the United States, and the recent turmoil in international currency and financial markets is not likely to change the trend. There is nothing new about manufacturers outsourcing part or all of the manufacturing process, however, given the increasing tendency to outsource all or part of the manufacturing process, there are some twists and turns which American companies should be aware of when sourcing from foreign countries.
The article applies generically in some cases to companies’ supply chain issues anywhere, but is tuned to highlight concerns for companies considering offshore production.
Taking production offshore is frought with hidden costs. This article does a good job of underscoring many of them. Read it here.
Made in America: U.S. Manufacturers Keep Their Seats in Furniture December 14, 2008
Posted by Jeff Fuchs in Lean Thinking, manufacturing, supply chain.Tags: lean, manufacturing, offshoring
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In an article about the US furniture industry, the Pittsburgh Post-Gazette reported that, “more than a decade ago…cheap overseas labor and other factors threatened to turn ‘Made in America’ into an endangered species. Maintaining designers, factories and a skilled workforce became a point of pride for some companies.” For instance, American Leather’s “computerized factory contributes to the flexibility consumers enjoy with these products, making the turnaround time exceptionally quick.” Recently, it “acquired John Charles Designs, expanding its fabric offerings.” Greg Harden, President of McConnellsville, New York-based Harden Furniture Co., said that “the country is beginning to pay a price for ‘hollowing out’ the economy by allowing so much manufacturing to migrate off shore.” Harden noted that his firm “manufactures 96 percent of its product domestically.”
The article profiles American Leather, Harden Furniture Company, C.R. Laine, Kindel Furniture Company, and Hickory Chair.
Read the full article here.
Made in America: U.S. Manufacturers Keep Their Seats in Furniture December 14, 2008
Posted by Jeff Fuchs in Lean Thinking, manufacturing, supply chain.Tags: lean, manufacturing, offshoring
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In an article about the US furniture industry, the Pittsburgh Post-Gazette reported that, “more than a decade ago…cheap overseas labor and other factors threatened to turn ‘Made in America’ into an endangered species. Maintaining designers, factories and a skilled workforce became a point of pride for some companies.” For instance, American Leather’s “computerized factory contributes to the flexibility consumers enjoy with these products, making the turnaround time exceptionally quick.” Recently, it “acquired John Charles Designs, expanding its fabric offerings.” Greg Harden, President of McConnellsville, New York-based Harden Furniture Co., said that “the country is beginning to pay a price for ‘hollowing out’ the economy by allowing so much manufacturing to migrate off shore.” Harden noted that his firm “manufactures 96 percent of its product domestically.”
The article profiles American Leather, Harden Furniture Company, C.R. Laine, Kindel Furniture Company, and Hickory Chair.
Read the full article here.
The Future Of Outsourcing December 8, 2008
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, outsourcing
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Globalization has been brutal to midwestern manufacturers like the Paper Converting Machine Company in Green Bay, Wisconsin. First came the 2001 recession. Then, two years ago, one of the company’s biggest customers told it to slash its machinery prices by 40% and urged it to move production to China. Last year, a St. Louis holding company, Barry-Wehmiller Cos., acquired the manufacturer and promptly cut workers and nonunion pay. In five years sales have plunged by 40%, and the workforce has shrunk from 2,000 to 1,100. Employees have been traumatized, says operations manager Craig Compton. “All you hear about is China and all these companies closing or taking their operations overseas.”
But now, Compton says, he is “probably the most optimistic I’ve been in five years.” Hope is coming from an unusual source. As part of its turnaround strategy, Barry-Wehmiller plans to shift some design work to its 160-engineer center in Chennai, India. By having U.S. and Indian designers collaborate 24/7, PCMC hopes to slash development costs and time, win orders it often missed due to engineering constraints — and keep production in Green Bay. Barry-Wehmiller says the strategy already has boosted profits at some of the 32 other midsize U.S. machinery makers it has bought. “We can compete and create great American jobs,” vows CEO Robert Chapman. “But not without offshoring.”
Chapman and others see a chance to turn around dying businesses, speed up their pace of innovation, or fund development projects that otherwise would have been unaffordable. More aggressive outsourcers are aiming to create radical business models that can give them an edge and change the game in their industries. Old-line multinationals see offshoring as a catalyst for a broader plan to overhaul outdated office operations and prepare for new competitive battles. And while some want to downsize, others are keen to liberate expensive analysts, engineers, and salesmen from routine tasks so they can spend more time innovating and dealing with customers. “This isn’t about labor cost,” says Daniel Marovitz, technology managing director for Deutsche Bank’s global businesses. “The issue is that if you don’t do it, you won’t survive.”
Read the full article in BusinessWeek here.
The Future Of Outsourcing December 8, 2008
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, outsourcing
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Globalization has been brutal to midwestern manufacturers like the Paper Converting Machine Company in Green Bay, Wisconsin. First came the 2001 recession. Then, two years ago, one of the company’s biggest customers told it to slash its machinery prices by 40% and urged it to move production to China. Last year, a St. Louis holding company, Barry-Wehmiller Cos., acquired the manufacturer and promptly cut workers and nonunion pay. In five years sales have plunged by 40%, and the workforce has shrunk from 2,000 to 1,100. Employees have been traumatized, says operations manager Craig Compton. “All you hear about is China and all these companies closing or taking their operations overseas.”
But now, Compton says, he is “probably the most optimistic I’ve been in five years.” Hope is coming from an unusual source. As part of its turnaround strategy, Barry-Wehmiller plans to shift some design work to its 160-engineer center in Chennai, India. By having U.S. and Indian designers collaborate 24/7, PCMC hopes to slash development costs and time, win orders it often missed due to engineering constraints — and keep production in Green Bay. Barry-Wehmiller says the strategy already has boosted profits at some of the 32 other midsize U.S. machinery makers it has bought. “We can compete and create great American jobs,” vows CEO Robert Chapman. “But not without offshoring.”
Chapman and others see a chance to turn around dying businesses, speed up their pace of innovation, or fund development projects that otherwise would have been unaffordable. More aggressive outsourcers are aiming to create radical business models that can give them an edge and change the game in their industries. Old-line multinationals see offshoring as a catalyst for a broader plan to overhaul outdated office operations and prepare for new competitive battles. And while some want to downsize, others are keen to liberate expensive analysts, engineers, and salesmen from routine tasks so they can spend more time innovating and dealing with customers. “This isn’t about labor cost,” says Daniel Marovitz, technology managing director for Deutsche Bank’s global businesses. “The issue is that if you don’t do it, you won’t survive.”
Read the full article in BusinessWeek here.
China Losing Luster with U.S. Manufacturers November 30, 2008
Posted by Jeff Fuchs in supply chain.Tags: offshoring, supply chain
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Two years of disastrous quality-control breakdowns, from foul fish and lead-tainted toys to poisoned drugs and dairy products, are taking their toll on China’s allure as a manufacturing platform. A new study found that quality concerns are among the chief reasons U.S. manufacturers are scaling back plans to source more goods from China.
Instead, U.S. companies are looking harder at Mexico and other locales closer to home when exploring where to put new capacity. The reasons for the shift suggest serious problems for China’s export machine that go far beyond the concerns over rising costs for wages, shipping, and materials that got a lot of attention earlier this year.
Read the full BusinessWeek article here.
China Losing Luster with U.S. Manufacturers November 30, 2008
Posted by Jeff Fuchs in supply chain.Tags: offshoring, supply chain
add a comment
Two years of disastrous quality-control breakdowns, from foul fish and lead-tainted toys to poisoned drugs and dairy products, are taking their toll on China’s allure as a manufacturing platform. A new study found that quality concerns are among the chief reasons U.S. manufacturers are scaling back plans to source more goods from China.
Instead, U.S. companies are looking harder at Mexico and other locales closer to home when exploring where to put new capacity. The reasons for the shift suggest serious problems for China’s export machine that go far beyond the concerns over rising costs for wages, shipping, and materials that got a lot of attention earlier this year.
Read the full BusinessWeek article here.
The Rise Of Indian Manufacturing November 16, 2008
Posted by Jeff Fuchs in manufacturing.Tags: manufacturing, offshoring
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India is the cover story on IndustryWeek’s current issue. According to one article insie, if U.S. manufacturers are going to be competitive in the foreseeable future, they’ll need to access the growing market in India. With a middle class population estimated at between 215 million and 300 million and expected to reach 583 million by 2025, opportunities for global-minded manufacturers are abundant, not only in servicing the needs of this market but in creating products adhering to new business models that ultimately will ensure future global markets.
The full article is here.
The Rise Of Indian Manufacturing November 16, 2008
Posted by Jeff Fuchs in manufacturing.Tags: manufacturing, offshoring
add a comment
India is the cover story on IndustryWeek’s current issue. According to one article insie, if U.S. manufacturers are going to be competitive in the foreseeable future, they’ll need to access the growing market in India. With a middle class population estimated at between 215 million and 300 million and expected to reach 583 million by 2025, opportunities for global-minded manufacturers are abundant, not only in servicing the needs of this market but in creating products adhering to new business models that ultimately will ensure future global markets.
The full article is here.
Online Video: Mike Micklewright Discusses Hidden Costs of Offshoring November 16, 2008
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, supply chain
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In this 6 minute video, Mike Micklewright discusses the thoughtless offshoring of operations, focusing on manufacturing. Generally, outsourcing manufacturing gets you a 55% reduction in manufactured part cost. Mike ticks down a list of hidden costs and asserts then that the cost differential decreases to something more like 10%. From there, risks (think: melamine, lead) must be assessed. The second of a series of three discussions with Mike.
See the video on the Quality Digest website, here.
Online Video: Mike Micklewright Discusses Hidden Costs of Offshoring November 16, 2008
Posted by Jeff Fuchs in manufacturing, supply chain.Tags: manufacturing, offshoring, supply chain
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In this 6 minute video, Mike Micklewright discusses the thoughtless offshoring of operations, focusing on manufacturing. Generally, outsourcing manufacturing gets you a 55% reduction in manufactured part cost. Mike ticks down a list of hidden costs and asserts then that the cost differential decreases to something more like 10%. From there, risks (think: melamine, lead) must be assessed. The second of a series of three discussions with Mike.
See the video on the Quality Digest website, here.
