Bill brings an analytic perspective to the globalization question. He views really two reasons to source globally: availablility of expertise and low labor cost. Material and capital costs are essentially equivalent.
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In this 6 minute segment (download iPod compatible, 28MB), Bill Michels of ADR applies an analytic perspective to global sourcing. There are really two benefits to offshoring: (1) Gaining expertise unavailable in your home country, for instance, outsourcing tooling from the United States; (2) Gaining an advantage in labor.
Material and capital investment are essentially the same across countries. However, you are adding coordination and travel costs. You are also adding risk of falling afoul of regulatory requirements since the offshore company may be under a different regulatory regimen than you experience in your home country. Finally, the benefits of offshoring might be superseded by simply automating the process.
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