Home or abroad?

Herd instinct

Companies need to think more carefully about how they offshore and outsource

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Readers' comments




Minor point, but you cite Chesapeake Candle Co. in your article as a company that is reshoring. My information about candles in general is that there are stiff tariffs that prevent outsourcing the production. Which is why the American Candle industry has remained largely intact. If others know more on this subject please feel free to comment.


When it comes to outsourcing and in sourcing, America is its own worst enemy. The reason, it still uses medieval thumbs and feet the world has long ago discarded. Inch based goods do not fit into a metric world, as its forever-ongoing external and astronomical trade deficits show. Well, slow learners have to pay for their self inflicted shortcomings.

MrSilesian in reply to 2C

Wow! So the French started making automobiles 4 years before Benz Patent Motorwagen was made! How have the Nazis manage to erase this great French accomplishment from the history books?


There are factual errors about the French car manufacturers in this article: Peugeot makes cars since 1882 and Renault does exist since 1899. The makes Peugeot the older of two and not the younger, as the article states.

Kewal Khanna

Outsourcing and offshoring is historically in existence since time immemorial. Growing industrialisation, globalisation of world economy, coming into existence of GATT and now WTO has widened the sphere of outsourcing and offshoring. The fundamental principle of expansion it may be trade or for that matter any sphere is related to outsourcing and offshoring. It is a basic instinct with trade may be trading of commodities or manufacturing, it has to be need based and profitable. In today's scenario cost factor has become of much relevance which has resulted in shifting of manufacturing from the West to the East including China and host of other countries. Each country has to consider outsourcing and offshoring looking to its economy and resources, it cannnot be stopped in the name of protection. Whatever one may say it is a both ways traffic benefitting the coun tries outsourcing as well as the ones offshoring.


Excellent article!
McKinsey was quoted re companies following each other to low labor cost countries “in herd behavior.” They would be better off making offshoring decisions based on total cost of ownership. The Reshoring Initiative’s free Total Cost of Ownership software helps corporations calculate the real P&L impact of reshoring or offshoring. Current research shows most companies can reshore about 25% of what they have offshored and improve their profitability.
I was one of the business experts in Pres. Obama’s Jan 11, 2012 Insourcing Forum. I emphasized, and the assembled executives supported, the need for companies to more consistently utilize TCO analysis instead of price variance in making their sourcing decisions.



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