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Just finished reading this. Overall I agree with the main point (that quality control is easier to deal with when onshoring versus offshoring) but I think that that's something China can account for and improve on in the relative short term.

The thing that China CAN'T overcome at least in the short term is both the cost of shipping and the amount of time shipping takes. As the article mentions, a shipment of product can take up to 6 weeks whereas products produced in the US can be shipped within hours of completing production. There's just not any reasonable way for offshore production companies to overcome this issue that I can see in the short term and that could drive the onshoring movement aggressively, especially with the constantly increasing costs of fuel.




I see this is a problem for smaller companies just getting into outsourcing and for brand new products. There have been examples on here like wakemate that have had a really hard time getting quality products produced in a reasonable timeframe.

For bigger companies though with more stable product lines I think this is much less of an issue. Bringing manufacturing back is working for GE for more complex and expensive products. I am not sure you will see then bringing back the basic models of appliances though.

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It sounds weird, but I would encourage small companies to look at manufacturing locally. A company I used to work for in Ottawa manufactured small volumes of cameras locally (that really narrows things down). They used other companies in the area to etch and solder the boards (automatically), and then final assembly was performed entirely in the same office building where I worked.

The best part was, everyone was involved in the whole 'stack'. The engineering group I worked with handled QA, but also travelled downstairs regularly to help with manufacturing procedures. We watched assemblers and proposed design changes to make their jobs easier. The process created a virtuous cycle where the initial person laying out the board knew what kind of headers would be hard to connect in which enclosure (for example), and as a result the quality was very high while being competitive on cost.

I think an assembly process like that would have helped, for example, with the teething problems experienced by the Jawbone Up.

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Probably not, though if the trend in fuel and energy prices continues that may come to dominate the equation even for those things. The other thing is working capital - if it takes 6 weeks to ship and clear customs you will have a lot of capital tied up and that has an additional cost as well.

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True, but that is also a competitive advantage to these large companies. They can afford to have the capital tied up where smaller competitors can't.

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