Another reason outsourcing doesn't work....

[Papa Deuce]

Sure America loses jobs, sure customer service usually stinks, but here is one I never thought of.

I was reading Fortune magazine. New Balance sneakers are made in the USA and other countries. Well, NB had a contract with a company in another country ( sorry, I forget which country) to make "X" number of sneakers. Well, this company decided to make many thousand of pairs more than they were contracted for to sell behind New Balance's back.... at drastically less than New Balance sells for them.

So, the story was about New Balance, but in reality it was about how this happens way more than we know, or even the companies involved know. They call it "working the third shift".

So, even companies that try to bring us products at a lesser cost by manufacturing overseas, are getting screwed by the very people that they supply jobs to.

Nice.

 

[Galahad]

The problem with slamming outsourcing out of hand is that it denies reality. The global economy is here or at least it's coming fast. We won't survive and thrive in it by denying that it's here and trying to make it go away.

That said, we need to be very concerned about a lot of things about off-shoring (which is just the most controversial type of outsourcing). At my company we offshore some I.T. work. We have about 2000 software developers in the US. They tried, about three years ago, to offshore a lot of work and had to pull a lot of it back in. The quality just isn't there. One trick the offshore company tried is to tell us a project would take 100 of their people and they actually used 300 to do it. On the surface this doesn't seem like a big problem. The work was a fixed bid and it didn't cost us much more. But they didn't tell us how many people they were throwing at it. So when it came time to bring parts of the end-product in-house, we were completely unprepared for the scope of work that would be involved because the reports from the offshore vendor were that it was much less work than it really was.

There are a lot of problems to overcome but I'm afraid we aren't going to be able to make it go away. The way companies treat individual, often loyal, employees that are displaced by off-shoring is shameful, for example.