After decades of depending on China, US-based tech companies are now starting to hit the road in search of other places to outsource their manufacturing.
After decades of depending on China, U.S.-based technology companies are now starting to hit the road in search of other places to outsource their manufacturing.
"Some of this is a long time coming," said Sridhar Tayur, professor of operations management at Carnegie Mellon University's Tepper School of Business."They have been thinking about it for some time and adding new capacity in other places, so this is less of a sudden shift than you might think." Activists also focused on environmental issues. Electronics manufacturing can create a lot of pollution. For years, China had been seen as a dumping ground, where weak environmental laws allowed companies to eliminate the costs they would have incurred in their home countries.
"A lot of the manufacturers want to lock you in to longer-term agreements and at larger quantities," said Jonathan Eaton, national supply chain leader for Grant Thornton."U.S. companies often do that at their peril." The problem companies face is the nature of consumer electronics. New models come out"every 12 to 18 months," according to Eaton — or even more rapidly in some cases.
"If you talk to most supply chain professionals and leaders, you're starting to see more of these companies have a seat in the C-suite," said Scott Grawe, an associate professor of supply chain management at Iowa State University.
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