Offshoring

Topics: Cost, Costs, Wage Pages: 1 (377 words) Published: January 25, 2013
Here, There and Everywhere. Tamzin Booth http://www.economist.com/news/special-report/21569572-after-decades-sending-work-across-world-companies-are-rethinking-their-offshoring Priscilla Urevbu Summary

This article talks about a trend that started as far back as the 1980’s when companies began sending many jobs abroad mainly because of cheap labor. However, that trend is quickly changing. Companies are discovering that the wage gap is narrowing and many of the disadvantages are now starting to outweigh benefits of sending jobs abroad. One of the points mentioned in the article is that wages in china have risen 10-20% in the last 10 years, whereas wages in America and Europe have remained about the same. Also, another disadvantage of send production abroad is that shipping can be very expensive. In recent years shipping costs have gotten higher such that the cost of producing elsewhere and shipping to the US is no longer as cheap as it used to be. The time factor is also a big issue. Many times transit takes as long as six weeks which makes it hard for companies to fulfill their orders in a timely manner. In conclusion, the article makes a note that a lot of companies are now rethinking their decision about going offshore. Opinion

Most of the companies went offshore to save money, and I can see where they are coming from after all the whole goal of having a business is to make profits however in my opinion many of the companies did not take the time to properly analyze the other costs involved in moving jobs offshore. Many also forgot to consider how it will affect the quality of their service when it comes to shipping time and sometimes the...
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