Since '9/11' the world economy
seems to be slowly improving, at least for certain sectors. Any
country that had a decent economy, apparently was affected, at
least some what, by the WTO, (World
Trade Organization) rules. The US has lost millions of jobs to
overseas countries where labor cost are cheaper. Of course, in some
cases, the quality of that work is bad to poor, but not always. The
key is to find cheap labor without the tradeoff of worse quality. But,
some businesses don’t seem to care about the quality, as long as the
market price of their stocks goes up, they are happy, as are the share
holders, but in the log term, to what price.
Outsourcing in this country has
increased so much that Lou
Dobbs of CNN’s
Money has a list of confirmed companies that are exporting jobs, in a
weeklong series that he ran on his show. For a list of companies that
have exported jobs click here
and then on the 'Exporting America' link on that page. There is a web
site called outsourceoutrage.com,
courtesy of the Communications
Workers of America, (AFL-CIO, CLC.). Sometimes when doing
this, you fail to meet the customer's
requirements.
On January 8th
2004, Levis
Strauss & Co. stopped making their jeans in the U.S. It closed
the last 2 plants. A 150 year tradition lost. Wal-Mart is putting in a
big super store in one of the towns that should employ about the same
number of people that got laid off. That’s the good news, the bad
news is the people at Levis Strauss & Co. was making about $14.00
per hour and Wal-Mart will be paying $8.00. The reason, it is cheaper
because of labor, overseas.
We just purchased a Black
& Decker sander. We were looking to purchase the 4
Sheet Palm Sander, but they appeared to be out of stock in the
hardware store we went to. So we purchased their new 1/4
Sheet Finishing Sander instead. Got it home, opened it up
and I noticed that the place where you put the sandpaper was not
level. The plastic piece was warped. Now this thing wasn't a little
off, there must have been at least an eight of an inch difference. So
my girlfriend said she wanted to try it anyway just to be sure. And
sure enough, one corner of the sandpaper was destroyed and the center
of the sandpaper was literally untouched. So I called Black &
Decker and they said that the models they had at the customer support
center were not that way. So we took it back to the hardware store we
purchased it from, and while I personally would not have purchased
another one, my girlfriend decided to after we stumbled onto the one
we were originally looking for, in the wrong place. So she purchased
the 4 Sheet Palm Sander. Well, I checked it before we bought it, and
it was a little off, but I'm hoping not enough to make any difference.
I have always had a great respect for Black &
Decker, but that respect has been tarnished some because of this
experience. I mean, it was cheap enough, but after we spent time
inspecting it, testing it, and returning it, and then inspecting the
new one, well that adds cost onto the purchase. Of course since it was
our cost and not Black & Decker's, they are happy. It's cheaper
and more convenient for them to have us return the product and then
have it reworked overseas where labor is a lot less.
Now, I can reckon, and you don't
need a Ph.D. to figure it out, that the companies that are Six
Sigma and exporting part of their operations, and/or using
suppliers more frequently than in the past from some of the newer
trading countries, I'll just bet that all the smaller companies in
these new trading partner countries there, if not most of the larger
ones as well, are not six sigma trained. What do you want to bet? So,
is Six Sigma out the door, or are they going to train all these people
in it? How much will that directly cost?
The theory, so we've been told, is
that it will make products cheaper to purchase. And indeed it has.
less expensive and a lot lower quality.
But, let us presume that the quality gets better as time goes on, just
as the quality of stuff made in Japan in the 50's was a lot less than
it is today, and the prices stays low. Everything is much less
expensive because labor is much cheaper overseas. Much! People
overseas can make for a weeks' or sometimes a months' worth of
work, (and usually not five, 8 hour days), what the same US
worker gets a day. There is a reason for that of course.
Not every company can outsource
successfully. They may all think they can, but here are some examples
of outsourcing done poorly. Communications is a key problem for
the companies that do it wrong. Let us take SBC/Yahoo® for an
example.
We have SBC/Yahoo® DSL as our ISP, (Internet
Service Provider). So I went and purchased a router and set-up my
LAN. Everything was going fine. Then all of a sudden, my email
stopped working with Microsoft® Outlook® Express. When I ran the
program from SBC/Yahoo® to trouble shoot the problem, it crashed. Ok,
time to call 'tech support'
SBC/Yahoo's call center is located in India. No
problem with that, the people were very courteous, but not very
knowledgably about the mechanics of the internet and email servers. As
with all call centers, no matter where they are located, the first
people you talk to just have a check list with solutions to the most
common problems. A script as I like to call t hem. I don't know about
you, but I NEVER have a common problem.
After the person insisted that I do through a
variety of system changes, that I kept insisting wasn't going to fix
the problem, I finally asked to talk to a supervisor. They agreed,
went to get one and came back and said the supervisor was busy with
someone else and could I wait. I said all right. This was the first
sign that something was wrong.
After about 15 minutes, the same person came
back on the line, (not the supervisor), and said that I had to 'opt
out of port 25 filter'. So they cave me instructions on how to do
that. You had to fill put a form online. So I did, and when I pressed
the submit button, after a few seconds the screen went blank, and the
information was never sent. I tried for 8 hours to opt out of port 25
to no avail.
So I called again. After 5 minutes of explaining
to the new support person what had transpired thus far, They gave me
the direct email address the for was sending to and told me just to
send them email. But they were busy and it would take a day or so.
After 2 days, and Outlook still not working, I started playing around
with Outlook and trying various things.
After a while I found that there is a second
place to put a username and password. I had to put my SBC/Yahoo
account name and password in to be able to what is called mail
relaying.
It doesn't matter if you are
implementing Six Sigma some form of ISO
or QSM, if you cannot communicate what is going on to your outsourcing
partners, you are not going to make it work and have any customers
left when you finish.
