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Greg M. Jung
User Rank
Platinum
Re: Profitability vs. Outsourcing
Greg M. Jung   7/8/2014 11:50:09 AM
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I agree with you Rob.  To your point, there may be additional international tariff codes and regulations that will encourage manufacturing of certain goods to be closer to our foreign customers.

Rob Spiegel
User Rank
Blogger
Re: Profitability vs. Outsourcing
Rob Spiegel   7/8/2014 8:28:06 AM
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Good point Greg. Even with the most efficient systems, some outsourcing would be necessary just to keep manufacturing close to customers. US producers will probably still want to manufacture goods in Europe for Europen customers, and in Asia for Asian customers. 

Greg M. Jung
User Rank
Platinum
Profitability vs. Outsourcing
Greg M. Jung   7/2/2014 1:10:37 PM
NO RATINGS
I believe there will be a reduction of outsourcing, but we won't see the total 'end of outsourcing' as some in the article may foresee.  As long as outsourcing is perceived to generate more profitability due to lower material costs, importing of parts will continue (but perhaps at a reduced rate).  There will always be other countries that will offer lower cost goods.

One reason for this will be a non-level playing field that other countries have.  The United States has stricter EPA,  OSHA regulations etc. than other lower cost regions and this will continue to be a factor in lower pricing.  Another reason is that many corporations have accounting models that do not take in the total cost of ownership during the decision process.  Lower material costs look very attractive until cost of quality, expedited freight, product shipping delays and personal travel expenses are also factored into these accounting equations.

Again, I believe Industry 4.0 can help, but until some of the other critical cost factors are addressed, I am concerned that the perception of profitability will still bias towards outsourcing.

isaacsam
User Rank
Iron
Re: bring it back
isaacsam   7/2/2014 3:39:11 AM
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It is really interesting and I must appreciate for such brilliant task.

Chemdry

Rob Spiegel
User Rank
Blogger
Re: bring it back
Rob Spiegel   6/20/2014 12:53:04 PM
NO RATINGS
I agree it's very interesting Naperlou. I remember the mass customization concept from the 1990s. Nothing much happened with it until recently. Now the term has been brought out from the mothballs. It can be done now.

naperlou
User Rank
Blogger
bring it back
naperlou   6/20/2014 11:48:21 AM
NO RATINGS
Rob, a strong link between engineering and manufacturing?  That's such a 1980s concept. 

I am involved in the IIoT and Big Data areas.  These are important in implementing a dream for manufacturing of mass customization.  This is something that the cars companies have been talking for a long time.  It has been a reality, but we don't generally take advantage of it becuase of the lead time.  With Industry 4.0, that lead time can be significantly reduced.  This makes obsolete the process of making something en mass overseas and shipping it. 

It is an interesting time to be invovled with these technologies.



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