Eldredge, These are very complex issues. I wonder at times how corporate executives navigate through them. As you noted, the consumer is the one at the end of all these and the impact of them need to be monitored closely.
You're right - and there is a line of reasoning that local environmental issues and policies are China's responsibility to deal with internally. I was actually coming more from a consumer angle, with regard to things like lead in paints and dangerous contaminants in pet foods, etc that have made headlines in the past. As a consumer, I need to be assured that the proper testing and due diligence is occuring, so that these types of issues are not a concern.
Jay, There's a troubling aspect for me in all this. Companies are increasingly managed for short-term gains and executives are responding to demands from investors to deliver those gains. Imagine what will happen to Apple if its revenue were to grow only 10 percent or less in coming quarters. It would be considered a shock and its stock will sink.
The second part is the startling reality that company executives no longer believe they have any duties to their society but only to shareholders. My believe is that there is an intersection where these responsiblities meet and failure to mix them up is what has resulted in the overwhelming transfer of good, viable jobs to foreign shores.
Eldredge, Raw materials and component sourcing issues will become a part of the China story for foreign manufacturers. You mentioned compliance in the regulatory environment and that is a big issue for China and manufacturers. How much of a role this will play in the market is uncertain. Companies may not care as long as it doesn't impact their operations but will respond if activists point this out.
Exactly. The issue with trying to squeeze everything dry and not prepare for the unexpected is you will face substantial losses and large set backs. If a company is just getting the momentum going in a positive way then all of a sudden slam on the brakes because of unforeseen circumstances, that company might not get a chance to move forward again.
I understand everybody is trying to get the most for the least, but eventually that thinking will sink your ship. There are plenty of places state side willing to do what it takes to gain business.
The main argument against my position has been that the economics won't work. Companies want to make as much profit as they can and therefore it makes sense for them to squeeze as much as possible from the current system. However, the same theory applies when you introduce too much danger into your operation. It may not make sense now but disaster doesn't provide any warning.
elctrnx_lyf, My confidence comes purely from looking at the numbers and from years of watching developments in the industry. Those who say the jobs won't come back are looking at the last 30 years of massive shift in jobs to the East but they seem to forget to look at the next 30.
The system is supposed to be optimal and my feeling is that the current situation is not. But I will expand on this later.
Your article sounds really confident that the manufacturing jobs will come back to US. But I'm really not sure how this is going to happen as the fundamental principles of businees is to reduce the operational expenses and increase the profits. Looking forward to see the future blogs on this topic !!!
I agree completely that manufacturing will return stateside. How much and when is a big question. We are headed for a global disaster if we put all of our proverbial eggs in a basket (China) and hope that nothing happens. There needs to be more focus on regionalization. I think the disasters in Japan and Thailand helped show how vulnerable we are and why we can't put all resources in one region.
Once companies can figure out reasonable wages and find skilled workers willing to work, manufacturing will return. It will most likely not return to the levels it was, but any growth is positive.
Arenasolutions, I will post the update to the blog on Tuesday. The outsourced assembly jobs can be done in the US and they used to be done here. The products that resulted from them also used to be sold worldwide and not just in the rich, developed economies.
You are right that many of the assembly jobs won't find many takers here in the West but the wages they currently pay won't stay in the range they are now forever. They are moving higher and this rate will accelerate in coming years, jacking up the total cost of ownership to companies.
I agree manufacturers need incentives to return certain jobs to the West. Some of the incentives are already being introduced or drummed up by Western governments concerned about employment conditions at home. As my follow up blog will detail, however, the greatest incentives will come from the marketplace and from the realization by companies that a single-source provider no matter how profitable today is inherently dangerous. I don't expect all jobs to migrate back but many will and it won't be just because of government incentives.
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.
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