Depending on complexity of such a parts, outsourcing may not yield such great luck. Unless such parts can benefit from massive overcapacity to manufacture them, much is lost without economy of scale.
In his book, China Inc. Fishman gives a very good accounting of an Il machine shop who both outsources cheap parts but leaves difficult tooling, and anything that he does not want ripped off, copied and mass produced, far far far far away from China. And even then, it is just a matter of time before one must confront the beast eye to eye. Game over player one.
In the pharmaceutical industry, it is common place to outsource the production of low cost, high labor intermediates to china and india, and then perform the high value/extremely high quality work in more expensive labor markets. This is largely done for 2 reasons: the first is quality of product, but the second is simply intellectual property. Again, it is only a short time before it is game over player one. As the chinese make all the rules, and play by none of them.
Given the intense pressure to compete with low cost manufacturers, it gets to be a very tricky game intellectual cat and mouse. For instance, one can purchase from rogue manufactures in china, any chemical agent that is currently undergoing clinical trials in the United States, long before it has been approved here. The minds of folks in china, already at work scouring patent literature, looking for an opening.
Right now we're in an era where one needs to be able to give customers the "china price", but needs to be able to do it in "american time"....
Future players in "Jay's Guru Manufacturing Worldwide Deathmatch" have to be innovative, creative, and only play the cards that yield the greatest value and only at the time when they can best be played.
Such will be the case for years to come, or until we have all devalued our currency enough to be purchased, lock, stock, tool and diecast, round bottom flask and all... |
