Tuesday, November 4, 2008

Keeping Manufacturing in Europe

Offshoring is not all success stories as Jan Snoeij of Logica points out - productivity is lower in lower wage countries; container transport costs are skyrocketing, and competition for labor in countries such as China is fierce, to labor costs are up and re-training costs are very high. Hidden costs for management travel, delivery issues, insufficient quality, cultural differences.
To produce in Europe, executives need to involve the plant floor personnel - get them to understand the new direction and what it means for them. Challenges in resources abound: materials & shortages of skilled people - also equipment, since Europe is competing for the latest & greatest with developing economies. Spend money on training people is a key for hidden champions. An important question is whether IT is flexible enough, integrated with the business. So maybe everyone here at the MESA EU conference can work to keep jobs here.
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