Industrial Engineer Engineering and Management Solutions at Work

May 2013    |    Volume: 45    |    Number: 5

The member magazine of the Institute of Industrial Engineers

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Outsourcing revisited

10 ways to analyze the changing paradigm of where you should manufacture what

By Terence T. Burton

Outsourcing, a term to describe the transfer of U.S. jobs to developing countries, emerged significantly over the last decade or so. Its original objective was to set up a national presence in other countries such as China, Brazil, India and others with the potential for high revenue growth for goods and services. Today, more than 50 percent of revenues in many corporations come from international markets. The availability of low wage Chinese workers was another factor. What a winning strategy: big incremental global revenues, unlimited availability of resources, significant labor cost reductions, fewer government regulations, lower taxes and huge profits – right?

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