If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(ASQ)   Companies who send their manufacturing jobs overseas come to a major discovery: "The problem is that you can see now in looking back, once you move your manufacturing offshore, you're training your supplier to become your competitor"   (asq.org) divider line 90
    More: Obvious, killer  
•       •       •

3529 clicks; posted to Business » on 22 Sep 2012 at 7:40 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



90 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest

Archived thread

First | « | 1 | 2 | » | Last | Show all
 
2012-09-22 06:14:00 PM
Unintended consequences are a biatch.
 
2012-09-22 06:16:14 PM
automaker Toyota Motor Corp.'s Toyota Production System (TPS)

I hope they remembered the new cover sheet.
 
2012-09-22 06:30:43 PM
*GASP*
 
2012-09-22 06:42:27 PM
No no, like Baskin Robbins, these companies are selling you the "experience" not the actual product you are paying for... The outsource producers can't duplicate that.
 
2012-09-22 06:47:07 PM
Most of the people who moved the manufacturing didn't care about the long term consequences. They've cashed out and they live on their private islands.
 
2012-09-22 06:58:18 PM
Ain't that a shame.
 
2012-09-22 07:21:01 PM
Just lay off more people
 
2012-09-22 07:49:27 PM
gee what do you know, real life is more complicated than simple profit/cost black/white analysis would lead a simpleton to believe.
 
2012-09-22 07:52:35 PM
So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?
 
2012-09-22 07:53:13 PM
Major discovery? This happened to the U.S. consumer electronics industry decades ago. "Let's make some TV's over in Asia, don't worry it's just to get access to their market."

These examples of Chinese success stories like GM and Caterpillar being held out as how globalization benefits US firms, it won't be much longer before China is selling cars and heavy equipment in the US and the rest of the world.
 
2012-09-22 07:55:20 PM

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


That and fickle shareholders... What have you done for me today?
 
2012-09-22 08:01:45 PM

DrewCurtisJr: Major discovery? This happened to the U.S. consumer electronics industry decades ago. "Let's make some TV's over in Asia, don't worry it's just to get access to their market."

These examples of Chinese success stories like GM and Caterpillar being held out as how globalization benefits US firms, it won't be much longer before China is selling cars and heavy equipment in the US and the rest of the world.


My company moved manufacturing of products for use in China to China, mainly to supply larger manufacturers like GM and CAT. We only build simple, low tech equipment over there for fear of someone stealing our tech and selling it in our market. What we are building there they can't sell here competitively because of costs, and our newer tech is 30 years past what we are building there.

There are tariffs in place to protect our local market from foreign finished goods but there is not much protecting sub-assemblies. The tariffs and shipping costs on a finished car or heavy equipment is enough to keep that stuff from coming here.
 
2012-09-22 08:13:52 PM
i640.photobucket.com
 
2012-09-22 08:28:54 PM
The hell you say!
 
2012-09-22 08:30:43 PM
Short sighted asswipes. Didn't these morans realize that as the third and second world countries rose to first world status (like South Korea) they would want to make the sh*t they needed not only for themselves but for the rest of the world... and that by outsourcing american manufacturing you were giving them the keys to the truck that was about to run over your ass?
More manufacturers, call centers, and other businesses are finding this out as well... the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot. They have done more to destroy the middle class and long term economic health of this nation for short term profit than any recession of the past 50 years.
 
2012-09-22 08:47:09 PM
This required hindsight?
 
2012-09-22 08:52:26 PM
this happened to Schwinn Bicycles, twice.

as for automotive, China's policy of forcing foreign automakers to link up with local companies is not working as intended so far. the market share of domestics are plummeting. china's car market isn't growing much right now, but the German and American brands have been making big gains in sales at the expense of domestics (and now, the Japanese).

there are two Chinese car brands for rest of the world to fret about: Geely (via Volvo) and SAIC (via MG Rover).
 
2012-09-22 08:56:40 PM
Much like you had us training our subordinates to be our replacements
 
2012-09-22 09:00:05 PM
It took them how long to figure this out?

Corporations are idiots
 
2012-09-22 09:05:58 PM

kertus: It took them how long to figure this out?

Corporations are idiots


They have absolutely no foresight beyond the current quarter, if it is even that long. It's all about "fiduciary duty to the shareholders" who a lot of corporate apologists will tell you could be SUED by the shareholders if they don't maximize profits by offshoring production (which, BTW, I have never heard of one of these suits being brought, but you'd swear reading Fark that they happen every single day).

The MBAs that do this and the programs that teach it deserve what is coming to them in the not so distant future.
 
2012-09-22 09:11:47 PM

dumbobruni: there are two Chinese car brands for rest of the world to fret about: Geely (via Volvo) and SAIC (via MG Rover).


I only looked into Volvo and while manufacturing remains mainly in Canada and Sweden (for the American market), profits do end up going to Geely. This isn't quite the same thing this article is talking about.
 
2012-09-22 09:22:44 PM

rewind2846: Short sighted asswipes. Didn't these morans realize that as the third and second world countries rose to first world status (like South Korea) they would want to make the sh*t they needed not only for themselves but for the rest of the world... and that by outsourcing american manufacturing you were giving them the keys to the truck that was about to run over your ass?
More manufacturers, call centers, and other businesses are finding this out as well... the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot. They have done more to destroy the middle class and long term economic health of this nation for short term profit than any recession of the past 50 years.


Not just MBAs...Michael Dell moved from using Asus as a parts supplier to a system integrator. Now Asus under cuts Dell on computers and laptops.
 
2012-09-22 09:33:02 PM

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


My friend, who got out of the finance game long ago, called it "Next Quarter Syndrome" or "NQS".
 
2012-09-22 09:33:53 PM

sno man: Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?

That and fickle shareholders... What have you done for me today?


With the rise of High Frequency Trading at sub-millisecond speeds, this excuse is becoming moot. These investor don't give a crap about a company's fiscal performance so long as they can churn the market and make pennies from jitter.

It is also become a even more of a moneyed players game where those without high speed links and sophisticated computer algorithms conducting "traditional investing" cannot complete since the markets no longer follows perceivable logic.
 
2012-09-22 09:33:57 PM
Huh. How about that.

The next logical step is just to move yourself and your big pile of money over to China and live in luxury. SO LONG, SUCKERS! I mean, "America!"
 
2012-09-22 09:56:18 PM
As luck would have it, I am in the market for a washer and dryer. GE baby.
 
2012-09-22 09:59:04 PM

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


I've always wondered if it was a shift from dividends to retained earnings. With a dividend, you can get money back from your investment in the company while still holding onto the stock. When profits are reinvested in the company and no dividend is issued, the only way for an investor to make money is to sell the stock at a high price. This requires constant growth. So if you are not growing the company and the stock price, you are are a failure as an investment. So instead of focusing on profitability, you focus instead on stock price.

Yes, stock price should reflect profits, but it does not have to. You can pump that up in other ways that is not always good for the long term health of the organization.
 
2012-09-22 10:11:44 PM

wingnut396: Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?

I've always wondered if it was a shift from dividends to retained earnings. With a dividend, you can get money back from your investment in the company while still holding onto the stock. When profits are reinvested in the company and no dividend is issued, the only way for an investor to make money is to sell the stock at a high price. This requires constant growth. So if you are not growing the company and the stock price, you are are a failure as an investment. So instead of focusing on profitability, you focus instead on stock price.

Yes, stock price should reflect profits, but it does not have to. You can pump that up in other ways that is not always good for the long term health of the organization.


The story of "Chainsaw Al" Dunlap is a cautionary tale indeed.
 
2012-09-22 10:16:43 PM
But, but, we saved the brand!

No. Not really. You kept the name and ruined the quality.
 
2012-09-22 10:29:26 PM
Good, lower cost stuff for me!
 
2012-09-22 10:33:47 PM
Business school arsehatz all over still have the it's a service/information economy thing
 
2012-09-22 10:43:58 PM

rewind2846: Short sighted asswipes. Didn't these morans realize that as the third and second world countries rose to first world status (like South Korea) they would want to make the sh*t they needed not only for themselves but for the rest of the world... and that by outsourcing american manufacturing you were giving them the keys to the truck that was about to run over your ass?
More manufacturers, call centers, and other businesses are finding this out as well... the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot. They have done more to destroy the middle class and long term economic health of this nation for short term profit than any recession of the past 50 years.


These are probably the people that believe in "American Exceptionalism" to a destructive degree.
"Those will never figure this out, or by the time they do, we'll already be years ahead of them."
 
2012-09-22 10:50:28 PM

dumbobruni: this happened to Schwinn Bicycles, twice.



Sadly. Every time one of my friends wants advice from me on what brand bike to buy, they open up with "Schwinn's are still the best, right?"


Sigh.
 
2012-09-22 10:57:59 PM
I worked for a personal computer company. We outsourced production to a Taiwanese vendor ... which promptly began selling knockoffs in Europe. Copyright protection? What copyright protection?
 
2012-09-22 11:12:04 PM
Apple and Samsung anybody?

And patent law aside, you can't pay people a tiny percentage of your business to do most of the work and expect it to last forever.

But I was assured corporate persons were good were above average citizens at the least as are their ceos and such. So I'm sure the wealthy will stay loyal to country if we ever cease to be the biggest buyers of their goods.
Right?
 
2012-09-22 11:20:12 PM
And as far as that goes, I hold no loyalty to the rich who threw us away for outsourcing.

If it is now time for them to be thrown away in the free market search for cheaper goods, then I guess that's the way it goes.

They'll still land better than we do.

Is there any way we could increase our debt to bail them out?
 
2012-09-22 11:55:01 PM

dumbobruni: this happened to Schwinn Bicycles, twice.

as for automotive, China's policy of forcing foreign automakers to link up with local companies is not working as intended so far. the market share of domestics are plummeting. china's car market isn't growing much right now, but the German and American brands have been making big gains in sales at the expense of domestics (and now, the Japanese).

there are two Chinese car brands for rest of the world to fret about: Geely (via Volvo) and SAIC (via MG Rover).


Maybe you should check out the Top Gear episode about this. What is important here is to note the rate of change. And to a certain extent the general approach to intellectual property.
 
2012-09-23 12:00:05 AM
 
2012-09-23 12:02:49 AM

rewind2846: the MBA morans who pushed these ideas so hard in the 80s and 90s should be lined up against the wall and shot.


I don't think they were morans. They got rich AND made America poor, so their dollars are worth a lot more now.

They should be shot, but they're not morans.
 
2012-09-23 12:17:55 AM
Not the sharpest knives in the drawer, are they?

Not only that, all of your factories are now in a foreign country.
 
2012-09-23 12:30:43 AM

Wyalt Derp: So many business decisions seem to be made only with short-term gains in mind, rather than long-term sustainable profitability - a negative consequence of the bonus culture?


A negative consequence of our current flavor of capitalism.

Stock prices ("faith" in the company to make higher profits next quarter) matter more than what the company actually produces. Quarterly statements matter more than long term goals.

It's a stupid system.
 
2012-09-23 12:33:05 AM

sendtodave: It's a stupid system.


Oh. Sorry, I should have read more, to see that 8 other people have already said this.
 
2012-09-23 12:35:22 AM

Lando Lincoln: The next logical step is just to move yourself and your big pile of money over to China and live in luxury


I moved myself, and my small pile of money to China.

I'm living pretty luxuriously, I guess.

Nice beaches, at least.

i10.photobucket.com
 
2012-09-23 12:38:04 AM

Omnivorous: I worked for a personal computer company. We outsourced production to a Taiwanese vendor ... which promptly began selling knockoffs in Europe. Copyright protection? What copyright protection?


It's not rocket surgery. Our industrialization was nothing but copying from others (the British, etc.). That's what a lower level country does.
 
2012-09-23 12:44:24 AM
Har har har.
 
2012-09-23 12:50:17 AM
CSB:

One of my off-shored jobs was in the corporate IT shop of a Fortune 50 retailer. They began swelling their software development ranks with contractors (including Yours Truly) until the IT department had a ratio of about 2 to 1, contractors to employees. The contractors were highly skilled and actually did the work. The employees supervised the contractors and filled the copious paper pushing jobs that their little corporate IT empire scheme had proliferated over the years. Unbeknownst (at least for a while) to the contractors, the employees started having employee-only meetings with IT management to plan the off-shoring of all of the contractor jobs. This process took about 18 months, and the contractors were kept in the dark until the last possible moment -- and coincidentally right about the same time that the economy was tanking and jobs were becoming scarce.

Long story short, the company laid off hundreds of US domestic IT workers, replacing them with some H-1Bs on-shore and sending the bulk of the work off-shore.

A couple of years later, the same company fired its CIO, the one who had championed this whole scheme. He didn't "resign to pursue other opportunities." They FIRED him. Then they turned around and fired the VP who had been put in charge of the off-shoring.

A former manager friend of mine told me that after they had swept all of their US contractors out the door, it soon became obvious that they had also swept all of their institutional technical knowledge out the door with them. To this day, they're still trying to salvage the situation. The damage that this caused in wasted time and money, not to mention the hundreds of lives it disrupted and the damage it caused to this company's reputation in the IT ranks, is hard to pin down. So far, I haven't heard of anyone they screwed over going back to work for them. Nobody -- including me -- trusts them. What's to stop them from doing it again?

</CSB>
 
2012-09-23 12:56:05 AM

Fark Me To Tears: CSB:

One of my off-shored jobs was in the corporate IT shop of a Fortune 50 retailer. They began swelling their software development ranks with contractors (including Yours Truly) until the IT department had a ratio of about 2 to 1, contractors to employees. The contractors were highly skilled and actually did the work. The employees supervised the contractors and filled the copious paper pushing jobs that their little corporate IT empire scheme had proliferated over the years. Unbeknownst (at least for a while) to the contractors, the employees started having employee-only meetings with IT management to plan the off-shoring of all of the contractor jobs. This process took about 18 months, and the contractors were kept in the dark until the last possible moment -- and coincidentally right about the same time that the economy was tanking and jobs were becoming scarce.

Long story short, the company laid off hundreds of US domestic IT workers, replacing them with some H-1Bs on-shore and sending the bulk of the work off-shore.

A couple of years later, the same company fired its CIO, the one who had championed this whole scheme. He didn't "resign to pursue other opportunities." They FIRED him. Then they turned around and fired the VP who had been put in charge of the off-shoring.

A former manager friend of mine told me that after they had swept all of their US contractors out the door, it soon became obvious that they had also swept all of their institutional technical knowledge out the door with them. To this day, they're still trying to salvage the situation. The damage that this caused in wasted time and money, not to mention the hundreds of lives it disrupted and the damage it caused to this company's reputation in the IT ranks, is hard to pin down. So far, I haven't heard of anyone they screwed over going back to work for them. Nobody -- including me -- trusts them. What's to stop them from doing it again?

</CSB>


I'm sorry you went through what you did but thanks for telling the story. It gives me hope that someday lots of corporate officers will be fired. Amen.
 
2012-09-23 12:56:28 AM

Fark Me To Tears: What's to stop them from doing it again?


Fear of being sacked?
 
2012-09-23 01:03:05 AM

Fark Me To Tears: Fortune 50 retailer


Hmm. I know that you don't want to divulge the company, but...

Wal-Mart Stores
Nordstrom
Target
Costco Wholesale
Best Buy
Lowe's

One of these? Hot or cold?
 
2012-09-23 01:25:20 AM
Just an interesting FYI to go along with that story is that all of NBC's servers around the country are also managed out of that same plant in Louisville. I live about five minutes away from there and interviewed a few years back but turned them down because I was getting out of IT at the time. They aren't actually managed by NBC but by some outside company that also does server work for a few other people who takes part of their payment from GE as free rent in one of their office buildings.
 
Displayed 50 of 90 comments

First | « | 1 | 2 | » | Last | Show all

View Voting Results: Smartest and Funniest


This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »






Report