Offshoring in the west. Viable in the long-term or just lucky?

I found this a very interesting article to come out of WalesOnline. Major multi-national Tata, which makes everything from trucks to tea, has invested £800M in Welsh steelworks facilities. The Tata Steel spokesperson said the reasons for this investment were because of the quality of the workforce, strong industrial relations and a supportive Welsh government.

It's welcome news for the 8000 people employed by Tata in Wales, but more broadly offers an interesting twist on the offshoring issue and its implication for Western manufacturers.

Could manufacturers in the US, Europe and other western nations be genuinely considered as viable offshoring alternatives for the big manufacturers? eg those from India and China. The majority of economic arguments up to now would say otherwise.

Two of the reasons why you might think western manufacturing nations were unattractive offshoring alternatives; a quality (highly paid?) workforce and industrial relations practices, were some of the reasons why Tata were drawn to investing in Wales. Are these features that much of an enticement for overseas investment?

Another byproduct of the success was the Welsh government was able to 'on-sell' education via its FE colleges to the Indian education department - this may have helped seal the deal.

What do you think? Is it a viable alternative for western manufacturers to attract BRIC-type (Brazil, Russia, India, China) investment?

Forget onshoring (reshoring) - what about MIMOC?

Do you ever a read a post and say to yourself "Man, this person is smart!". I've only read a few posts by AJ Sweatt and all fill me with excitement and envy. In a post dated October 2011 (nothing like keeping my finger on the pulse), he discusses reshoring and how the concept is important in redressing the balance of unneccesarily lost jobs overseas, but ultimately not sustainable.

Instead he suggests MIMOC - Manufacturing in Markets of Consumption, which apparently has been around for years. Known by Coca-Cola and many well-known auto manufacturers, the process specifically locates production locally for exposure to local markets. Makes sense.

The benefits of MIMOC are:

• it encourages exports
• it’s sustainable
• it simplifies politics & public opinion
• it creates jobs
• it creates, nurtures & moderates the global manufacturing network

I also like his point that MIMOC gives corporations an "out". Corporations can relocate operations based on where the local market is situated. No need to admit failure over an unsuccessful offshoring initiative.

Click here to read the full article. 

Reinventing Manufacturing - Germany’s Fulfilling Future

An article from Pierfrancesco Manenti posted on Manufacturing Executive details how Germany (The China of Europe) emerged from recession more robust thanks to progressive manufacturing policies such as increased labour flexibility and an overall focus on manufacturing as a base for competitive advantage. Significantly, as operations efficiency and customer fulfillment increasingly dominate the German manufacturing agenda, sourcing from lower-cost countries is ranked as less important.


Click here to read the full article.