My father, when sizing up global matters over a martini or two, used to say "the pendulum always swings back."
I think of that when we discuss the nature of outsourcing and offshoring today. For years, the pendulum swung to the side of the argument that embraced key benefits:
Proximity to emerging markets
Occasional tax or currency benefits
Now, the pendulum swings back the other way, at least partly. Bolaji Ojo pointed this out several weeks back when describing the insights he got from the famous McKinsey report. (See: Why Manufacturing Matters & Where Best to Do It.) He wrote:
Until I read the McKinsey report, I had been wondering if I wasn't mistaken in disagreeing with the massive, decades-long transfer -- or outsourcing, if you prefer -- of Western production activities to the Far East and Easter Europe.
Another data point
Then there was Gary Pisano's articulation nearly four years ago, in which he argued that the further away manufacturing is from R&D, the more difficult it is to stay competitive. That's because designers can learn best from peeking over the shoulders of their manufacturing counterparts to see what's working and what isn't on the line.
Where's the pendulum today? Avnet Velocity vice president and EBN community member Wade McDaniel is going to give us a clear sense for that Tuesday morning (February 19, 8:00 a.m. PT). That's when he'll present his view of the state of outsourcing during a 60-minute webinar that I'll host.
McDaniel, a 25-year supply chain veteran, has an excellent perch from which to offer his assessment. I hope you join us Tuesday. Here's a link to the webinar information.
In the meantime, what's your take? Where is the pendulum on the outsourcing offshoring clock?
Brain, would you think that labour costs are the only factors, NO. There are different other costs like working cost/running cost and various other overheads like tax, availability, transportation etc can make the process tidy.
Let me give you an example-Let's say Spain's Debt held Externally by Banks in France and germany is 100 Billion Euros.
The way they would tackle the situation is by first ;Annoucing Aggressive Capital Controls[To prevent any Money from Exiting Spain];then they would re-introduce The Peseta as the Currency in which all our Debt which was previously denominated in Euros will now be Denomiated and repaid in Pesetas(which will start trading in Global Market on 1:1 with the Euro).
Instantly,there would a be a rapid Devaluation of the Peseta in the Market of close to 40%-50% or so.
Which would mean 1 Euro would become worth about 2 Pesetas.
This will instantly HALVE the Debt they have to repay (in terms of Euros).
Of course,there will be Negative consequence of such a drastic move.
1)Spanish Inflation (on Imported Products) would be much higher.
2)Spain would lose access to Global acccess Temporarily and be totally Dependent on IMF Aid in the Interim period.
3)Banks in Germany and France will see massive Losses as well as some Banks will fail;this could also end up putting the very existence of the Euro under threat.
But the impact on Spain's Economy (to be freed off all that Debt) would enormous.
The Spanish Government would be free to not only Print its own currency but also to Lend money wherever it sees fit(as against now where Germany and France are calling the Shots).
This Debt Burden(on Spain)needs to be wiped out sooner rather than later.
Else Spain will never Grow again and the Human tragedy will continue to escalate out of all proportion.
You may be correct. Like, I said earlier I am not a pro on economy and financial policies.
However, what clicks me is that they can't produce any jobs today because of the burden on them by the banks. If the shift to the Peseta their debt would fall? You are saying that the Peseta would be a currency valued higher than the Euro?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.