The manufacturing share of the USA economy dropped from 21% in 1980 to 18% in 1990, 16% in 2000 and 13% in 2008.From 2000-2007 USA has experienced an average of 3% decline in number of employment.
Consider this now China’s manufacturing share has grown from 4% in 1990, 6% in 1995, 10% in 2000, 13% in 2005, 14% in 2006, and 16% in 2007 to 18% in 2008.
Number of manufacturing companies in Georgia is approximately 700. These employ about 9.2% of Georgia workforce. Georgia lost 52,400 jobs.
With recession all the impact felt like a big blow. Then in one of my network meetings I came to know that several of manufacturing companies have finally decided to close doors. If they are not able to match the price where developing countries are able to give US stiff competition there is no way these jobs will be retained. How to beat the labor prices cost of manufacturing, material, packaging and shipping along with following all the regulations for ISO certifications.
A lot many contracts are lost for price or want of certification.
So how does the offshored product get the same certified seal?
Has the quality changed for them?
Suppliers from other countries are still able to meet the quality and safety guidelines. Again, there is limited check for these regulations in imports. How much oversight can you have when a majority of products are off shored?
Does it mean the customer is satisfied? Maybe. The cost is a huge factor but if the product does not work well such great divide in the ratio of quantity vs quality will bear the consequence of lost customer loyalty.
Some of the manufacturers are coming back to USA; GE is moving manufacturing of its energy efficient water heater to USA which is about 400 jobs. Ford Motors, Caterpiller, NCR, are moving back to USA. The frustration of consumer over poor quality control, recalls, long product delivery cycle has made this return possible.
Quality Control is the biggest parameter which cannot be introduced at the end of product manufacturing but in each phase of its development. It is the only feature which will dictate if organizations will make gains or loss in bid to one of the off shored manufactured product.