What happened to the Good Old Manufacturing? - Part 1
Guest Post by Varun Chhibber, Associate Consultant, MFG-ADT Online, Infosys
Recently there has been a lot of hue and cry over the outsourcing and the job losses that followed. Major companies have been accused of exporting jobs to Asian countries such as China when there has been an ever increasing need of job creation in their native countries. To this companies argue that they are creating a lot of jobs indirectly by creating opportunities and if the jobs are not moved to save efficiencies, eventually it will lead to further job losses!
What used to happen?
In earlier times major companies used to employ lakhs of employees. All the manufacturing used to be at one place and this provided huge employment opportunities to workers which led to the rise of a new prosperous middle class. This has changed over the years and today the manufacturing supply chains are spread across the whole globe.
Rationale for Outsourcing
But a part of this trend has been changing with the advent of ecommerce, more and more companies are going the online way bypassing the traditional channels (retailers, wholesalers etc.). Directly approaching customers saves a lot of cost and due to this reason some manufacturers are shifting their focus from manufacturing overseas.
By manufacturing in say USA, what a manufacturer gains? :
· Made in USA Tag has its premium and perceived quality is higher (valued by customers)
· Reaction to the new trends could be swifter if manufacturing is done locally (quite applicable to apparel manufacturing).
· Quality issues can be solved well in time avoiding heartburns later due delay in delivery to the customer, rejection of the consignment or going to the market with sub quality products.
This is where we come into picture and we can help our partners by providing them with online solutions in the domain of ecommerce which will help them go directly to their customers. This doesn't have to be the only way going forward (different channels can be employed simultaneously), but it could be one of the ways for future.
What do you think?