I agree with you that the outsourcing to China should be curtailed for the reasons you stated.
There are other factors, too. The quality of things coming from China varies from barely acceptable to terrible. Have you bought one of the leather belts made in China? You will be lucky to get two months service out of it before it disintegrates and looks terrible. This was not true of U. S. made leather belts for years. Or the much advocated compact fluorescent lamps made in China to replace incandescent lamps have serious power supply design or component problems—far too many of them fail within seconds or a few hours, unlike the original such lamps made elsewhere a few years ago. HP printers made in China are unreliable from my viewpoint, too, unlike the original HP printers of say ten years ago.
I would not worry about them having the 'fastest' super computer, becasue actually it is not, it was all just publicity.
specifically they have utilized GPU's in the design, which are great for the 'wow' factor but unfortunately do not produce a sustained processing stream, a bit like running a marathon, but only capable of completing the first 100m in 8 seconds, then falling behind the rest of the pack.
What many people fail to recognize about China, is the lack of 'innovation' anyone can copy someone else's product cheaply, but until you can innovate independently your not going to make much progress , and i'm afraid that by definition of its nature communism does not exactly instill people with innovative skills, in fact in the 1950's they went out and ensured they completely destroyed all innovative methology it has taken nearly 70 years for even a spark to be seen.
I'm afraid that cheap labour by lines of mindless production staff does not and never will equate to innovation no matter how cheaply they can produce the goods.
This is an important subject and very controversial. Despite all the problems of moving production to China there is a bottom line – return on investment. Our tax structure is favoring companies to go outside the U.S.A.If you want to stay in business you have to do what others do and go to China.
Almost every tool in the U.S. is made in China and I really don’t understand how we could survive Chinese embargo or the worst a war. They can direct all production towards its own needs and they have done it so many years ago when China became a communist state. By now they have the fastest super computer in the word, which used to be our domain and their military spending is not public. In peaceful times the economical exchange was beneficial to both countries under free trade agreement, but our prosperity has ended and we cannot afford cheap things from China without local employment.
I was told by an offshore contract manufacturer (CM) that I should not worry about the time intensity to do something since labor rates are so cheap. They said the raw materials were more costly to them.
I have seen that some things that raise domestic costs more than overseas costs are involved with hand placement of components and hand soldering. My latest designs I had the ability to use enough board space to limit all components to one side. This allowed for a single pass thru the reflow oven. I had to have some through-hole parts, but since all components were on the top side, the CM could place and wave solder those parts after reflow.
Previous designs (before my watch) had fine pitch components on both sides with a mix of through-hole parts on both sides too. It forced two passes through the reflow oven plus hand soldering the through hole components.
As I said. if you can design things to lessen human contact through the processes, you will see the costs between domestic and overseas start to converge. Not all the way due to other overhead costs, but it can get close enough that the logistics nightmares with overseas procurements can outweigh the costs. (I personally like to have CMs at arm's length and no more...)
Bola, Yes, I believe the West can still be competive and rival south east Asia outside of design. I do believe the we still have a lot of untapped resources in information technology than we care to give credit for. Take the RFID (radio frequency identification technology) that provides tons of data about the products beyond barcode that simply identifies the product. It is the same technology in the EZpass transponder, it came from LOS ALAMOS defense lab.
RFIDs are currently being used for the tactical level of the supply chain management at this time, it is basically computing the inventories, quantity, location etc. Its adoption into operational and strategic management are still untapped. These two areas are where the US had been masters in the past and still have some competetive edge.
I completely agree with you; we took the easy way out. Fixing this will be hard but nonetheless needs to be done because bringing design and manufacturing back to the US will help spur the economy, employ people and help reduce the deficit and reduce our dependency on other countries. People in the C-Suite and The Supply Chain need to realize that shipping our manufacturing around the world is just as costly/cheap as making it here once you've factored in shipping costs/logistics/manpower/security/fuel etc to say nothing of the environmental impact and the loss of control
...and to "backorder's" point- Part of the stimulus package should have had provisions for companies keeping the design and manufacturing in the US or bringing it back here to the US.
Whether a carrot or a stick, companies should either be rewarded for raising their domestic mfg or penalized/taxed more for increasing their % of international manufacturing
The US car industry faced a similar challenge in the 80's over the quality of its manufacturing. The president got involved, government got involved, US citizens got involved and we resurrected an industry.
Kmullins, Interesting take on the topic and one I hope to comment upon in a subsequent column. But you are absolutely correct that so far we've taken the easy way out and design engineers have been in some way complicit with executives desperate for a labor cost advantage. I guess what you are saying is that the West can be competitive, right? If that's the case, I would like to know further your thoughts on how we can rival south east Asia outside of design -- where we have the edge still -- but primarily in manufacturing, the area where we've trussed up now like chicken headed for the dinner table.
Consider what goes into the manufacture of a component. In my case, a circuit board. You have components, labor and overhead (building, etc.). Being a global market, components are not too much different around the world. Labor is probably the biggest cost difference, correct?
Labor can be hand placing components, manual soldering of connectors, etc. If one designs their circuit board properly in the first place, the amount of hands that need to touch it during build are at a minimum. An automated assembly line in the US gets to be not much more expensive than one in another part of the world.
My point is that a properly designed circuit board will not have that much more advantage being built overseas as to being built in the US. The relative cheap labor rates overseas have allowed design engineers to do sloppy work and still come out with a product.
Talking of CEOs with vision, what has the government done for these companies in particular? I would like to see a report on how exactly the big tech firms have benefitted from the stimulus package rolled out by the govt.
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.