View Full Version : Hidden Cost of Outsourcing?
Adrienne Selko
8/9/2006, 09:07 AM
Re:Smartsourcing: The New Way To Drive Innovation (http://www.industryweek.com/ReadArticle.aspx?ArticleID=12129)
Besides being informative, this article is prophetic in more ways than one. Most companies focus on the cost aspects of offshoring without realising what they are losing by not using India's thinking talent.
How long can you run sweat shops from a financial benefit standpoint?
S.Malhotra
New Delhi, India
Adrienne Selko
8/11/2006, 08:07 AM
Further comments from S. Malhotra Sunil , New Delhi,
I love the coinage "innovate innovation". I have believed for a long while that creativity will finally come centre-stage from being a peripheral "cosmetic" activity in businesses.
When capital shifts from money to knowledge, it is quite a no-brainer to understand that the enablers are human beings. Trained thinking in making connections that result in innovative ideas must now be taught as techniques in schools. Not only in the US but in India as well.
Why? Because India has always been a leader and has influenced world thinking through the ages. Therefore we're now going to see the next new wave of "Indiashoring" which will have much more than low-cost associated with offshoring.
Every thought-led discipline and multi-disciplinary Indiashoring is the next buzz!!
Abogle
8/14/2006, 09:52 AM
The US is in big big trouble in the future of our economic and national security, as we let other countries leap frog us in science and technology, and as we continue to shift our resources and infrastructure to other countries in the short sighted quest for mega profits. The manufacturing sector has been the historical driver of innovation, and we have let competing countries gain this edge at our expense. And with the dumbing down and obfuscation of science education is leaving our children ill equipped to compete with China and India for the knowledge based future.
Abogle
8/25/2006, 07:03 AM
Every thought-led discipline and multi-disciplinary Indiashoring is the next buzz!!
On the Nightly Business Report a couple weeks ago they had an Indian economist on for an interview. he said that he is expecting another 25-40 million jobs being Indiashored over the next decade. Not just mfg jobs, but more service oriented and tech jobs as well. His comment was "you aint seen nothing yet" in regards to the pace of jobs going to india.
How could the US economy possibly absorb the loss of 10-20% of its jobs? And what jobs will be left? Sounds like a recipe for the soup lines of the great depression to me with that kind of unemployment
kevin_22
9/28/2006, 07:02 AM
its insane!
BWBingham
11/21/2006, 12:48 PM
There is a huge hidden cost in lost and disgrunnled customers. I get so sick of talking to the India people who cannot understand me. The culture gap shows up on every phone call. I have changed my television service provider and my cell phone provider because of the way I was treated by outsourcing of customer service. If everyone that was not treated like they want to be did that, things would change.
jamet123
12/15/2006, 02:00 PM
I love the phrase "smartsourcing" :-)
I just reviewed The World is Flat (http://www.edmblog.com/weblog/2006/12/book_review_the.html) which covered some of these topics and I have blogged about hearing Thomas Koulopoulos talk about Smartsourcing (http://www.ebizq.net/blogs/decision_management/2006/10/live_from_delphi_smartsourcing.php)and give his Road to Agra (http://www.ebizq.net/blogs/decision_management/2006/10/live_from_delphi_the_road_to_a.php) pitch.
tektra
12/16/2006, 06:44 AM
What is the Hidden Cost for Americans' "save less borrow more" ? If this is not solved, fear more outsoucing for cheaper...
Abogle
12/17/2006, 09:12 AM
Most Americans I know that when informed of the costs of outsourcing and cheap foreign imports would gladly pay a little more for quality US made products. it is simply a matter of a lack of understanding and the constant barrage of pro free trade talking points that clouds their thinking.
When given the choice of paying a little more to keep US factories humming and US workers working, and saving 17 cents on their tube of toothpaste while jobs go overseas, will opt for the former rather than the latter.
Clearly a lack of savings is a problem. The US has a negative savings rate. This is largely a matter of too easy credit, and lack of incentives to save as the primary culprits. But the negative savings rate is only one piece of the outsourcing puzzle. Clearly bigger and much more detrimental to the US manufacturing economy is China's currency manipulation, intellectual property theft and product dumping - all of which are in violation of the WTO and sound business ethics.
The US is in big big trouble in the future of our economic and national security, as we let other countries leap frog us in science and technology, and as we continue to shift our resources and infrastructure to other countries in the short sighted quest for mega profits...
Yes, we have to stop "giving away the store" both at our universities and in the private sector.
And it looks from another of her articles, that congress is working against us:
"This Congress might ease up on the issuing of H-2B visas, says AMR Research, due to Speaker of the House, Nancy Pelosi's tie to the high-tech area of San Francisco. This past Congress decreased the number of these types of visas issued from 200,000 several years ago to just 65,000 last year."
Of course, these are H-1B visas, not H-2B. And the limit was temporarily increased from 65K to 195K and returned to its normal, excessive level a couple years ago. Then they added 20K more for those with master's and doctor's degrees -- a "compromise" because the executives wanted to have no limit at all for such people.
In FY2006, some of the H-1B1 sub-category visas went unclaimed, so USCIS rolled them over into the general cap for FY2007.
They finally made public the public data from the LCAs for FY2006:
http://www.flcdatacenter.com/
but though they state that it takes only a few minutes for an LCA to be approved, they claim that they're unable to make the public data public in time for US citizens to have a shot at applying for these positions.
Adrienne Selko
1/16/2007, 11:29 AM
Reply to article: Looking At The 110th Congress
Note: An error was made in the original article. This visa is H-1B.
An IW readers Replies:
"This Congress might ease up on the issuing of H-2B visas, says AMR Research, due to Speaker of the House, Nancy Pelosi's tie to the high-tech area of San Francisco. This past Congress decreased the number of these types of visas issued from 200,000 several years ago to just 65,000 last year."
You're apparently talking about the H-1B visa, though the numbers are still a little off. The annual limit was artificially increased from 65K to 195K temporarily, and that temporary increase expired. Then they added another 20K for those with master's and doctor's degrees, and added a bunch of exceptions for non-profits; local, state & federal gov't; and colleges & universities. The current limit is thus over 85K, and estimates on actual visas issued range from 90K to 110K per year. Some 6,100 unused H-1B visas from FY2006 in the H-1B1 sub-category were rolled over into the general limit for FY2007.
Also created was the E-3 category with similar terms and conditions, for those from Australia, with an annual allotment of 10,500.
In any case, whether you see it as 65K or 85K or 95,500 or 110K the current numbers are excessive in the extreme in light of the huge pool of idle and under-employed science and tech talent.
Many jobs also have gone to Canada, why peoples in U.S. seldom comment about it. Most likely Chinese and Indian are not competing with the American workers.
tektra
4/11/2007, 10:25 AM
Hidden Cost of Outsourcing? Built up a new Japan empire!
dileskdo
4/12/2007, 09:34 AM
I believe you have it wrong. Dr. Deming had most to do with that see quote below:
"Now more than ever, we need to remember the teachings of Dr. Deming: simply put, quality first and follow through with the honest practice of developing quality products and quality people."
Shoichiro Toyoda
Chairman and Former President, Toyota
tektra
4/14/2007, 07:18 AM
IMHO, probably the Korea War and Viet Nam War gave more demands and chances to the Japanese as well.
The old Chinese (most of them had passed away) all remember that the Japanese made stuffs were craps, my grandmother never bought an pair of socks even an inch of cloth which were Japanese made although they were cheaper, until 1980s China imported a huge number of TV sets from Japan, she still did not believe the Japanese could make quality products...
charolastra
4/2/2008, 07:15 PM
Though I am from the Philippines, I totally agree with you. The Philippines is one of the countries that is at the forefront of providing a sizable amount of talent pool for Business Outsourcing. Whatever implications it has right now, it means one essential thing for the Filipino people, and that is, it creates jobs for the unemployed.
Many jobs also have gone to Canada, why peoples in U.S. seldom comment about it. Most likely Chinese and Indian are not competing with the American workers.
You might want to check your facts on this one Tektra. PBS Nightly Business report had a trade minister from Canada on for an interview a couple weeks ago. Turns out Canada has an even bigger problem with outsourcing than the US, a greater percentage than the US of Canada's manufacturing jobs have been shipped off to china