I was talking on my portable phone yesterday and it slipped out of my hand (good ‘ole butterfingers) and proceeded to smash against the floor, snapping off the battery cover, and sending the battery itself sliding across the floor and underneath the couch. Gotta love when that happens. Anyway, after I reached under the sofa and grabbed the battery, I noticed the battery had a big label that read, "Made In China." As I put the battery back in the phone I noticed another "Made In..." marking and guess what, it wasn't America.
So, even though it is cliché, I spent the rest of the day paying attention to where stuff was made and originated from. With the exception of a couple cars I saw on the road and a few other items here and there, most everything else was not made in the States, but rather off-shore.
Now the reasons for off-shoring are pretty well known, cheaper labor costs being chief among them, and it is safe to say that this is a business practice that is not going anywhere any time soon. But just because certain assumptions about off-shoring have become common knowledge, doesn't mean to say that these assumptions are true. Casein point are supply chain decision makers (hey, we get paid to know what they need) whose mantra is "better, faster, cheaper." They tend to assume that offshore options for reverse logistics and repair solutions are the best way to go. However, in reality, these options may not fit the bill.
For example: although at face value labor costs are cheaper in countries outside the US, the truth is that many countries, especially China and India, are experiencing a higher shift in wages. Additionally, with the various swings in the cost of crude oil, manufacturing, logistic, and distribution, costs are not so safe and low as they once were. Therefore, long-term investments in off-shore repair and reverse logistics outsourcing is not always the most optimal or safest bet. And that's not even taking in to account the varying strength of the US dollar and political instability in various low cost regions.
All right, our intent here is not to use "scare-tactics" to make our point, but rather to show the strength of another outsourcing option for supply chain manufacturers: right-shoring.
In the next post, we will explain why we here at Test Tech believe right-shoring is a superior alternative to off-shoring. So, be sure to check back, or better yet, enter your email address to the top on the left of the screen and get new blogs sent to your email as soon as they are posted.
