Risk of offshoring your crown jewels
Fortune (May 1, 2006)prints a report that should give everyone hungry for low-cost manufacturing in China pause. It seems that once you've trained the crew, handed over the blueprints and turned the crank on production, it is very hard to turn if off again. Meaning that once your sub-contractor has done their bit for you, there is nothing to prevent them doing just a little more - except that this time it's for themselves. In fact, they can do so much more that they can sell items that are indistinguishable from the real thing -- because they MAKE the real thing.
For all those looking for a reason - any reason - to keep manufacturing at home, this one might prove among the most compelling in the long term. Check it out.
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- Posted: Sunday, May 14, 2006
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