Outsourcing 101: A new seriesDec 30th, 2014 | By admin | Category: Electronic Design, Embedded Technology, Lead Article, Manufacturing
Outsourcing, both onshore and offshore, is here to stay and is very big business (link numbers), but it is not static. Suppliers in Asia and the Indian subcontinent are still the leading players but significant resources are growing in the US and the European Union that are challenging that traditional hegemony.
New Tech Press has been looking at this trend for the past few months and will begin publishing a series of articles and interviews beginning this month and running deep into 2015. What has become clear is outsourcing falls into distinct groups: Multinational enterprises providing soup-to-nuts services for large customers, foreign national organizations targeting US and Europe corporations and “blended” suppliers that feature local management with foreign-based resources. The latter two often provide unique specialization in design and industrial niches, like security, automotive and web design.
There are also distinct divisions in the cost of these resources that range from expensive but necessary when customers lack internal resources but need high quality support, to very inexpensive when customers can fudge on quality, expertise and schedule. The blended companies seem to span and straddle the differences.
Somewhat surprisingly, offshore resources located in the EU’s eastern most countries, Poland in particular, are demonstrating growth outstripping that of India and could soon reach parity. Those countries, because of a closer relationship, culture and respect for intellectual property are becoming a favored source of higher end service once considered the exclusive domain of India.
Another clear trend is the return of importance of precision machining in the United States. US based firms are finding that rising costs in personnel and shipping are negating offshoring benefits. That fact, combined with the expected lower quality, environmental factors and the rising use of high-quality 3D printing is making US-based manufacturing highly desirable and profitable once again.
These are the aspects and trends New Tech Press will be looking at in the coming months.