Tuesday, February 26, 2013

Will the Manufacturing Jobs Continue to Go Back?

It is obvious that manufacturing jobs have been coming back to the US from around world from early 2010. However, what remains debatable is whether it is a short-term effect or the beginning of a long-term de-globalization for the manufacturing world.

Big names including Whirlpool, GE and Apple have been on the long list of companies who shifted at least parts of their manufactory lines back to the US. More and more companies thing about taking job back home from developing countries mainly due to the economic consideration. The cost benefits for manufacturing companies have shrink to a surprising extent that Apple would consider hiring workers to assemble Macs in California!

Major incentives for this insourcing wave include the increasing workers’ wages in China and Southeast Asia, soaring price of gas, intellectual property concerns and environmental awareness. Among these factors, economic consideration still plays a dominant role when companies develop their global strategies.

Therefore, the insourcing trend seems inevitable as the costs of oil and labor continue to rise around the developing world. However, some would still argue that manufacturing may required relatively more skilled workers in the future, when robots can easily substitute for low-skill jobs, and it’s still much more cost effectively to hire skilled labors in the developing world, as education has been made available to many more people in those countries. As a result, it is still to early to draw a conclusion now.

Reference: http://bx.businessweek.com/supply-chain-performance/view?url=http%3A%2F%2Fwww.supplychainmusings.com%2F2012%2F12%2Fthe-new-manufacturing-destination.html

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