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Consulting Group Recommends More Outsourcing Thursday, July 15, 2004 A consulting firm, The Boston Consulting Group, has issued a report recommending an increase in the movement of industrial production offshore. In the report “Riding the Next Wave of Outsourcing”, released June 15, 2004, and a press release “Many More Industrial Goods Could Move Offshore, According to New Analysis by The Boston Consulting Group” issued Feb. 3, 2004, the consultants implored manufacturers to move more jobs to “Low Cost Countries”. Up to $150 billion of direct-manufacturing revenue “is in the ‘could move’ zone”, according to BCG. “That is more than 15 percent of business in the major industrial categories”. The movement offshore could affect all industries, from high-tech to traditional manufacturing areas. About 1.1 million associated direct-manufacturing jobs in the U. S. are in the “could move” category, according to BCG. “Our experience with industrial companies worldwide is that many management teams have not adequately assessed the opportunities and risks posed by LCC sourcing or the impact it will have on their competitive positions. Therefore, numerous U.S. and Western European companies have been surprised by the pace at which suppliers and customers have moved production and sourcing offshore,” said Young, head of BCG’s Industrial Goods practice. The report urges business to “Set aggressive targets” and ask themselves “What must I keep at home?” rather than “What can I send to LCCs?”. “The burden of proof shifts” from the advocate of outsourcing to the advocate of U. S. manufacturing, according to BCG. The report does not consider how out sourcing will affect the U. S. economy, or such factors as “who in the U. S. will buy the imported goods if workers lose the higher paying manufacturing jobs.” |