http://www.techforecasters.com/weblog/archives/rational-or-not-the-industry%e2%80%99s-eternal-search-for-lower-labor-costs/ Read what our thought leaders are thinking, in our every-other-Friday TFI blog entries. Sign up with your favorite RSS Feed service and get an automated alert whenever there's a new posting to the TFI Weblog. Wed, 21 Jul 2010 10:20:37 -0500 http://wordpress.org/?v=2.8 hourly 1 http://www.techforecasters.com/weblog/archives/rational-or-not-the-industry%e2%80%99s-eternal-search-for-lower-labor-costs/comment-page-1/#comment-980 DJS Fri, 15 Jun 2007 15:32:09 +0000 http://www.techforecasters.com/weblog/archives/rational-or-not-the-industry%e2%80%99s-eternal-search-for-lower-labor-costs/#comment-980 I've worked with several multinational companies during their outsourcing efforts. Of these, only 1 appeared to make any financial sense, using an offshore CM to take advantage of reduced component costs associated with larger purchased volumes. Even so, we dealt with severe quality problems and the eventual "cloning" of our products. The common theme I've seen with these companies is relatively young executives spearheading the transition to outsourcing, increasing the short term value of the stock and cashing in on the big payday then getting out quick before the financial fallout comes. I’ve worked with several multinational companies during their outsourcing efforts. Of these, only 1 appeared to make any financial sense, using an offshore CM to take advantage of reduced component costs associated with larger purchased volumes. Even so, we dealt with severe quality problems and the eventual “cloning” of our products. The common theme I’ve seen with these companies is relatively young executives spearheading the transition to outsourcing, increasing the short term value of the stock and cashing in on the big payday then getting out quick before the financial fallout comes.

]]> http://www.techforecasters.com/weblog/archives/rational-or-not-the-industry%e2%80%99s-eternal-search-for-lower-labor-costs/comment-page-1/#comment-979 GSW Fri, 15 Jun 2007 13:58:56 +0000 http://www.techforecasters.com/weblog/archives/rational-or-not-the-industry%e2%80%99s-eternal-search-for-lower-labor-costs/#comment-979 The quest to move to low cost is not necessarily just to save a buck or two but also to create a cash flow and markets in the regions where you move. The influx of capital catalyzes the market that you move into such that you reap from the selling into the market. This always happens at the cost of the infrastruture of existing market where you manufacture it but makes the product cheaper in the same market. The quest to move to low cost is not necessarily just to save a buck or two but also to create a cash flow and markets in the regions where you move. The influx of capital catalyzes the market that you move into such that you reap from the selling into the market.
This always happens at the cost of the infrastruture of existing market where you manufacture it but makes the product cheaper in the same market.

]]> http://www.techforecasters.com/weblog/archives/rational-or-not-the-industry%e2%80%99s-eternal-search-for-lower-labor-costs/comment-page-1/#comment-978 Chuck Tilleman Fri, 15 Jun 2007 13:56:11 +0000 http://www.techforecasters.com/weblog/archives/rational-or-not-the-industry%e2%80%99s-eternal-search-for-lower-labor-costs/#comment-978 You need to consider the stock holders and the stock market when thinking about a business decision. The idea of lower labor cost plays to the minds of the people that invest so the facts don't make any difference. A program to automate the process can match the model of lower cost and match the announced cost reduction but no mileage is gained with this strategy. The move has to be to the lower labor pool? Cover ass is in play here big time. You need to consider the stock holders and the stock market when thinking about a business decision. The idea of lower labor cost plays to the minds of the people that invest so the facts don’t make any difference. A program to automate the process can match the model of lower cost and match the announced cost reduction but no mileage is gained with this strategy. The move has to be to the lower labor pool? Cover ass is in play here big time.

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