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Offshoring's Innovation Blind Spot?

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You and your company consider a variety of factors in deciding whether to offshore: market location, skilled worker pool, regional risk, etc. Apparently, innovation opportunity is not high on that list.

That was an early takeaway from our most recent Velocity webinar, which we held Tuesday, Feb. 19, and which is now archived.

We asked a series of questions during Wade McDaniel's hour-long presentation, "Is Outsourcing Dead?" One of those questions: "When considering offshoring, what is your most important consideration?" Market location was the top response, followed closely by the location of skilled workers. Innovation brought up the distant rear at 3.4 percent.

Why does innovation opportunity rank so low among these offshoring considerations?
Why does innovation opportunity rank so low among these offshoring considerations?

What gives? Innovation usually equals savings and time-to-market advantage, and one would think that might get more of a positive response. What's your take on this? Do those response rates resonate with you?

In addition, I invite you to check out McDaniel's webinar. His thorough insights on and definitions of outsourcing trends were complemented by some really thoughtful questions from the audience.

Related posts:

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Jacob
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Supply Network Guru
Re: ‘is outsourcing dead’?
Jacob   2/27/2013 11:52:52 PM
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"Rather than outsourcing, we should be talking about concentration. Whether in the US or China, companies are worried about being too concentrated / dependant on one company or country. How can they work around it? How feasible is it to have redundant supply chains?"

Roques, why can't. We always have a L1, L2, L3 suppliers for the same component. So if L1 is not able to provide the necessary items in time and quality, then the order goes to L2. So there is no dependency.

Jacob
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Supply Network Guru
Re: ‘is outsourcing dead’?
Jacob   2/27/2013 11:50:14 PM
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Brain, am from India and my company are mainly in to embedded/ubiquitous domain. We have different departments for various functionalities staring from feasible study, design to end production. At various levels we had outsourced the works to third party companies/agencies for a smooth operation ans to reduce company's liability. For example some of the designs are outsourced to third part vendors, acquiring some of IPs from different vendor, purchase and procurement from another vendor etc. The only thing is we will do various quality checks at different levels.

Brian Fuller
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Blogger
Re: ‘is outsourcing dead’?
Brian Fuller   2/26/2013 11:10:44 AM
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The analyst Malcolm Penn was quoted this week as saying the semiconductor industry is now effectively single-sourced. This is 180-degree difference than 30 years ago when you have had to have a second-source because the processes were suspect. 

Now granted, this is for silicon manufacturing which is complex and breathtakingly expensive today. But it's a trend that going to bite the industry in the butt at some point. 

The $64,000 question, to your point, @Mr. Roques, is when to buy that redundancy insurance. It can't be purchased in silicon manufacturing, but it's still an option in other sectors of electronics. 

 

Mr. Roques
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Stock Keeper
Re: ‘is outsourcing dead’?
Mr. Roques   2/26/2013 9:29:59 AM
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Rather than outsourcing, we should be talking about concentration. Whether in the US or China, companies are worried about being too concentrated / dependant on one company or country. 

How can they work around it? How feasible is it to have redundant supply chains?

Brian Fuller
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Blogger
Re: ‘is outsourcing dead’?
Brian Fuller   2/25/2013 10:17:58 AM
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Jacob, thanks for your comment. Could you expand on that a little bit? What country are you in and what functions are being outsourced as you describe? Thanks! Brian

Jacob
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Supply Network Guru
Re: Take the quick poll
Jacob   2/25/2013 3:32:17 AM
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HH, it’s difficult to get all the favorable factors at one location. So companies are targeting to the best inorder to maximize their profit. Another option is outsourcing to other agencies with in their locality, so that both of them have the privileges of tax holidays and other privileges from states/countries.

Jacob
User Rank
Supply Network Guru
‘is outsourcing dead’?
Jacob   2/25/2013 3:14:47 AM
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Brain, 'is outsourcing dead', I don't think so. In my personal view still outsourcing has scopes, but may not from one country to another. It's happening with in the country/states across different countries. In my company, some of the functionalities are outsourced to third party agencies outside the company and within the country.

Hospice_Houngbo
User Rank
Supply Network Guru
Re: Take the quick poll
Hospice_Houngbo   2/24/2013 10:28:04 PM
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Location of skilled workers matters in choosing the right offshoring location and a second important factor is operational cost. A third one would be market location.

Hospice_Houngbo
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Supply Network Guru
Re: surveys get it wrong sometimes
Hospice_Houngbo   2/24/2013 10:20:51 PM
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@FLYINSCOT,

Good point about surveying the right representative sample. But I do thing that responses from polsters from Western countries will matter the most as Western- based companies are the most concerned. What do you think about that?

pocharle
User Rank
Supply Network Guru
Re: Build a survey with us?
pocharle   2/24/2013 8:34:40 PM
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It would be a good way to get the task done quick and get a broader response range.

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