@Gerry--for some of us, you are preaching to the choir. Others seem to be catching on. The following article talks in-depth about US companies that have moved operations to China and are becoming disillusioned:
You are also not alone in recommending Mexico--Texas A&M did a study some years ago about many of the advantages. I also am told that QC out of Mexico has improved a lot. Let's hope people are listening (or reading)
After experiencing the pains of outsourcing East, I would like the idea of outsourcing to our neighbors to the south simply because of the lessened time differential.
When assessing the pragmatic needs of a business, it's sometimes worth reflecting on the major qualms people have about involving their business with an offshore or foreign operation. One of these is that the concept of justice in many countries is shaped more by a legacy of violence than a spirit of cooperation.
It may very well be that Mexican labor costs are low because during strikes in Mexico people get killed. Knowing something about police tactics south of the border, it isn't surprising to learn that police use snipers with live fire to contain demonstrations (there is video footage of this).
My thinking on this is that when we enter into business with a foreign country living under an authoritarian shadow, we are bringing more than a purchase order to the table. We are coming from a place where class mobility, and other values we cherish, lead to prosperity. That way we encourage people away from violence and toward a more refined social contract, rather than a race to the bottom line.
That is an excellent point. I completely agree with your point. It is tough to know whether the organization you are working with is as socially stout as you but you can only hope they are. I would do my due diligence and keep an on the regulations for the region before inking a deal.
I ask myself, "Would I go there and do business face to face...?"
Although most of my bias is based on U.S.-based media coverage of other parts of the world, I would hope that my judgement would be sound enough to answer the question appropriately.
I have been actually. I thouhgt it was funny when I read a book and some commentary was made about how residents of South & Central America were afraid to come to NY due to the 9/11 atacks and all of the heightened security concenrs. Imagine that shift?
The same thing applies to many of us who thought that Africa is a country. The shit you are talking about is not just the examples you have sited but the same pressure and concern runs through the heart of multi-Millions of people across the globe
@barbara, thanks for sharing the link. Very informative. Just curious to know if this attitude toward's China is short lived because its election year or are we seeing larger shift in the American policies?
As you say, "The prospect of another major supply chain movement so soon after settling in overseas is daunting, to say the least." And that's a huge factor. If you already have operations running in China or elsewhere in the region going somewhat smoothly, it is highly unlikely you'll even casually consider starting all over again elsewhere: the start-up costs and research time involved is absolutely massive, in most cases.
But that being said, for companies that have yet to outsource... it would be very unwise to think of China as your only option. You've got to seriously consider your options south of the border given the current economic conditions, in my opinion.
But that being said, for companies that have yet to outsource... it would be very unwise to think of China as your only option.
@DennisQ, very true. Moreover its very risky to outsource to chinese companies. For example House Intelligence Committee is already examining if Huawei's and ZTE's expansion into the U.S. market will give the Chinese government an opportunity to hijack the nation's infrastructure to conduct espionage.
Technically & economically it is absolutely feasible to automate all low level electronics assembly jobs done by an assembly worker ( $ 15 / hr in the US and $ 2 / hr in China ) with precision vision-based robots at a cap cost of $ 150 k / per which would also create at least 0.07 well paid ( $ 30 per hr ) Programmer / Tech jobs per Robot to build and run it. We had done it in the US nearly 15 years ago for Cell Phones. But since then Wall St. has pushed all assembly jobs out of the US and stopped development in Advanced Robotics. The same goes for clean processing of chemicals and materials ( e,g. PCB s ) required for electronics. Bringing materials & assembly operations back to the US would leverage our unique strength in software and at the very least enhance tax revenue even if all the lost jobs are not restored. IP xfer / theft will be stopped so will the asymmetricc power of Wall St. who use the billions from outsourcing to buy Congress and manipulate / mislead half the general population against its own interest !
Simpler assembly jobs could of course always be sent down to Old Mexico or even Vietnam. The most significant benefit of stopping this wanton outsourcing to China would be that it will stop the sapping of US morale and restore US economy even if it takes about $ 500 billion public investment to revive US competitiveness in manufacture of high end of consumer electonics.
Chipmonk, The original comment you posted to Gerry Fay's article was edited to make it more relevant to the topic and also to comply with EBN standards. On this site, we focus on ideas, subjects and issues of relevance to the electronics industry and its supply chain with the objective of learning from each other and sharing best practices. We also realize that we are unlikely to agree on issues discussed here but respect the rights of everyone to put forward their ideas without being subjected to abuse or having their integrity questioned.
Do you know, some of the best doctors in the world to perform open heart surgery are from Mexico ?
In regards to the electronic industry, I strongly recommend that you take a better look at it's been designed and manufactured in Mexico
Mario8a, "Do you know, some of the best doctors in the world to perform open heart surgery are from Mexico ?" How does this apply to the electronic industry?
Well said anandvy, but if we would like to adopt that perspective, we could say similar approach was (potentially) used at the time of West coming to East bringing there its technology. Am I really wrong?
I would gladly discuss the options with anyone who is interested in learning more about the ins and outs of outsourcing in Mexico.
@Gerry, thanks for the post. I would to know what has changed in mexico that is attracting the investors now ? Is Mexican government making efforts to invite the investor's to its country ?
Hi, I work in Mexico in a design center for communication devices. Just like my company there are about 500 in Tijuana Mexico, please give yourself the opportunity to learn about what Mexico is exporting to the wold and why Mexico export more than all LA together
There are soooo many things to take into account that its simpler to go with the flow and go where everyone else is. It takes a lot to change from say: China, India to Mexico... the conditions could/might be better but everyone will doubt it, at least at first.
Maybe companies choose to not even ask the question of it's better or not, and avoid stakeholders from doubting their decision.
I think we can see by the dialog here there are a lot of factors to consider regarding outsourcing. I would hope compnaies learned some lessons from their expereinces in the Far East. It's not just location and cost; it is now environmental compliance, labor practices, risk of natural disaster, concentration of supply; proximity to end-markets and dozens of other things that should be measured. I think whether the decision is Mexico, Brazil (considered an alternative to Mexico, BTW) depends on the market you are trying to reach and the type of rpoduct you are manufacturing for starters.
I think every company would consider shipping and logistic costs when they do a cost-benefit analysis before considering to outsource their manufacturing. What they may fail to include are the overheads associated with it. This would include frequent travels to offshore site to meet with partners and communication expenses related to it. This would surely not be minor costs that can be neglected.
Honestly i'm glad an article was post to talk and recommend Mexico for investment, if you will like to read about story of success, google Plantronics in Mexico
Hi Porchale unfortunately the media can influence on people's mind more than we can imagine, yesterday i had a dinner with the secretary of tourism and he's point of view is the economy is affected, it's always feasible to show the difference between reality and perception when people is willing to travel and see it with their own eyes
I have friends that moved to Canada after sept 11, they still don't want to come back to the US
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.
Archived Dialogues
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.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
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.
To save this item to your list of favorite EBN content so you can find it later in your Profile page, click the "Save It" button next to the item.
If you found this interesting or useful, please use the links to the services below to share it with other readers. You will need a free account with each service to share an item via that service.
Tweet This
