Sunday, October 24, 2010

How people view sending work overseas

Please read this post in conjunction with my basic position paper "What is this blog all about?"
As stated in another post, there is a tendency when sourcing anything to automatically think of China.  People responsible for purchasing and sourcing think of China even when overseas sourcing is completely irrelevant for the item or product in question. 

I am concerned that this mindset now includes the view that it is modern and efficient to source in China and overseas generally, rather than sourcing in the United States.

I am a member of American Institute of Chemical Engineers.  The Institute publishes a member magazine, called Chemical Engineering Progress (CEP).  It is important to understand that members of the Institute are primarily employee engineers.  Relatively few members own their own companies.  Relatively few members are high-level officials in large companies. 

In almost every issue of CEP there is something for the employee engineer, such as information on job fairs, and articles on how the engineer can optimally manage his or her career path.  CEP also publishes results of salary surveys.

There is an editorial at the front of each issue of CEP.  Somewhere around 2003 or 2004 there was an editorial written by a man who operates R & D facilities in India.  The editorial extolled the virtues of sending R & D work to India. 

The appearance of this material, actually an "advertorial" rather than an editorial, was a complete shock to me and to some other members I had correspondence with.  It demonstrated that the staff of CEP, the people who edit and put together the magazine, had at that time, and may or may not have today, a total lack of understanding of the interests of the membership they serve.  The members are primarily interested in employment, not in seeing R & D work sent overseas.

The advertorial would have been suitable in a management magazine, but not in an employee magazine. 

I wrote to the then President of the Institute but amazingly received no reply. 

I believe that this incident is a clear example of people having the idea that it is modern and efficient to send work overseas.

CEP staff should realize that the work of editing and putting together the magazine each month could also be transferred to India, where staff with excellent skills in English are readily available.  Such an event would bring the New York City-based CEP staff down to earth in a hurry!

There are some products where China can admittedly offer some advantages.  An example is manufacture of TV sets.  However, even in this example, if we installed the same high-tech manufacturing facilities in the United States as are found in China, TV sets could be offered at competitive prices. 

But there are thousands of products where China offers no special advantage.  The work goes to China because it has become a habit among purchasing and sourcing executives.  Here is a particularly insane example.

My wife was doing some grocery shopping and noted packages in the freezer section labelled "Smoked Norwegian steelhead salmon".  She purchased a package and put it in the freezer at home for later use.  A few days later our granddaughter was visiting.  Looking in the freezer for something to eat, she saw this package.  She looked at the back of the package and let out a yell.  She had found a brief message in small type, almost fine print:  "Processed in China"!

It is completely impossible to believe that there is any cost saving in this Rube Goldberg procedure:  Catch the salmon in Norway, send the salmon in a frozen state to China for processing, and then send the processsed salmon in a frozen state to North America.  If the business firm behind all this wants to offer the product in North America, then process the salmon in Norway and send it to North America, or send the salmon directly to North America and process it in North America.


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