#Insource is the new #Outsource

workersA recent report from Deloitte suggests that bringing jobs back in house (Insourcing) is a small but growing trend against the much larger tendency to Outsource which has dominated western industry for the last thirty years.

Companies are increasingly realizing that Outsourcing is no longer the best value option. Anyone who has been involved in Outsourcing knows it is never as simple as it’s made out, often requiring intensive effort from Managerial & Engineering staff & extensive, frequent travel. Not to mention increased wage costs in China & India, increased shipping costs and numerous supply chain delays.

The biggest issue Western companies face with Insourcing is the lack of trained, skilled staff to deliver the service. Having made thousands of workers redundant in the pursuit of cheaper Outsource options this is somewhat ironic.

This need may be met by making good use of the highly skilled Freelance professionals who operate in the market to satisfy just such demand.


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Insource or Outsource ? #pmot #in

Far East manufacture should not be the default option

Far East manufacture should not be the default option

Over the last 14 years Manufacturing in the U.K has shrunk from a respectable 28% of GDP to today’s all time low of 10%.

So maybe it is time to rethink our outsourcing strategy ?

Over the years we have become very complacent in the U.K about manufacturing, and in many respects have given up the ghost. We have blithely subcontracted all of our manufacturing operations with no long term view of the consequesnces. We have given away millions of jobs for a short term monetary gain and are now reaping the rewards of an economy built on sand.

Outsourcing to the Far East should NOT be the default option. We need to look at the alternatives and take the following into consideration:-

1) Compare Apples with Apples – just because the Direct labour Cost may be cheaper in the Far East what about the support costs. It is inevitable that a subcontracted operation will need more indirect suppport, sometimes more than you could possibly imagine, and this cost needs to be accounted for somewhere.

2) Is the Quality of the product really going to be the same ?- how will you ensure this ?

3) Cost of shipping – with rising fuel costs have you taken this into consideration ? you need to understand the cost per unit shipped.

4) Environmental Policy – How does the transport and distribution of products across the world fit in with your Environmental Policy – if you want customers to “buy in” to your Environmental Policy it needs to be credible and any offshore manufacture and transport should be accounted for in your overall Carbon Footprint.

5) Time of shipping – can you afford to delay initial deliveries while they are on the Sea for 5 weeks or do you want to pay extra for air freight to ensure fast delivery ?

6) Have you considered the cost of Import Duties ?

Consider the success of some of our best industries in the U.K – auto manufacture, Aerospace, telecommunications, mobile phones etc etc

Outsourcing should remain a key component of our manufacturing strategy but should note be the default option. We need to challenge the assumption that manufacturing will be subcontracted by asking the right questions.



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Stop trade with China Now ?

Today’s news that the Chinese dissident Liu Xiaobo has been awarded the prestigious Nobel Peace Price for his peaceful resistance to Chinese oppresion and work for Human rights has raised the heat on the debate – “Should we stop trade with China now ?”

Most people are aware that the vast majority of Western companies outsource manufacturing operations to China for cost reasons and perhaps it is time we began to seriously question this strategy. Have a look at any company’s website and you will find a description of the company’s environmental policy but you will be hard pressed to find any information about the company’s attitude towards democracy or human rights.  If we are so concerned about Global Warming and it’s impact on the planet perhaps we should also be paying more attention to which regimes we do business with.

Of course the opposite argument is that by doing business with China we are helping to raise living standards which will inevitably lead to greater pressure for democracy and human rights.

However it would be nice to know that the debate had at least taken place and to see some kind of clear policy on company websites regarding human rights policy.

What do you think ?

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Stop corporate abuses - Amnesty International