I’m not sure to which “last bastion” the author of this piece on outsourcing refers: India, consumer electronics, or product engineering. But no matter the hypothesis, there’s problems with each.
From the top, India will hardly be the last source for low-labor cost manufacturing. I would argue that the heretofore untapped sub-Saharan Africa — home to one billion or so people — will someday own that title.
Second, consumer electronics are already highly outsourced, and once Sony caves — and it will — OEMs in that space will be little more than brand names, having ceded design, manufacturing, procurement and even advertising to specialists.
Finally, product engineering is also a highly outsourced, if indirectly. The author claims outsourced product engineering services could be worth $8 billion to 11 billion this year, but I suspect he’s counting only direct costs. Design re-spins are commonplace, and typically based on issues uncovered down the line. Who among us doesn’t see regular ECOs that are driven by data generated at fabrication or assembly or test? It may not show up in the numbers, but that’s a matter of accounting, not reality.
2 Responses to “Nothing Final”
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After reading this article, and reconizing the author, I’ve come to the conlcusion that this is a bit of marketing hype.
Agreed. I just used his premise to make a different point.