Diese Präsentation wurde erfolgreich gemeldet.
Die SlideShare-Präsentation wird heruntergeladen. ×

Onshoring vs. offshoring debate

Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Wird geladen in …3
×

Hier ansehen

1 von 27 Anzeige

Weitere Verwandte Inhalte

Diashows für Sie (20)

Ähnlich wie Onshoring vs. offshoring debate (20)

Anzeige

Weitere von Petra Smith (18)

Aktuellste (20)

Anzeige

Onshoring vs. offshoring debate

  1. 1. "The changing balance between risk and reward will see a rise in onshoring over offshoring" Breakfast debate 15th May, The Centre Point
  2. 2. "The Changing Balance Between Risk and Reward Will See a Rise in Onshoring Over Offshoring" Ed Ainsworth
  3. 3. Onshoring: The process of moving a business operation from overseas to the local country
  4. 4. 4 Companies are thinking more about moving back production to Europe or the US. Note: Surveyed American Manufacturing companies, with $1 billion or more annual sales figure. Survey covered whether they are planning, or actively considering, shifting production facilities from China to America due to increasing Chinese labour costs. (2012 Survey) Production Shift Consideration from China to America Moved to UK 12% Didn’t move 88% Manufacturers that moved operations in past 2 years Source: http://news.bbc.co.uk/1/hi/8434458.stm Not considering shift 63% Considering shift 37%
  5. 5. 5 Cost of labour are rising in Asia Source: OECD Economic Surveys CHINA – March 2013 – Overview as cited in National Bureau of Statistics Chinese Manufacturing Employee Migrant Wage Growth -5% 0% 5% 10% 15% 20% 25% 30% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Growth in the real wages of migrants
  6. 6. $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Shipping - Mexico Shipping - China Inland Transport Average U.S. benchmark crude-oil price $30 $56 $130 $150 $200 6 Transport costs are also rising The cost of shipping a standard, 40-foot container from Asia to the U.S East Coast Source: http://online.wsj.com/article/SB121331934552070357.html.html
  7. 7. 7 But labour and other costs in the UK are actually falling Source: Office for National Statistics / Work and Pensions 10 11 12 13 14 15 16 17 18 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 £perhour London (workplace, 2012) London (residence, 2012) UK (2012) Median Hourly Earnings of all employees in UK and London
  8. 8. 8 Within the UK • Production costs are further declining • Automating manufacturing process • Less labour intensive • 3D printing and robots • Availability of grants • Changing employment regulations to become more flexible • Spare Capacity Additional factors that are making onshoring more attractive Additional benefits • Increased quality of service • Reduced Co-ordination costs • Risk of supply chain disruption • Retention of IP • Compliance • Labour Standards • Bribery • Ease of increased customisation and configuration
  9. 9. GlaxoSmithKline In 2013, announced investment of £500 million in a new bio-pharma manufacturing facility - the first time in 40 years the company has built a factory on British soil. 9 New leaders Powergen Closed its Indian call centres, and re-opened with UK staff Santander Move back to the UK to improve customer satisfaction All calls are now handled with staff based in Glasgow, Leicester and Liverpool and the move had created 500 UK-based jobs.
  10. 10. 10 The balance of risk and reward has changed • Increasing salaries in Asia 5x increase since 2000 with an expectation to continue to grow 18% annual for the foreseeable future. • Decreasing salaries in the UK Decreased by 2.2% since 2005. (European salaries have also barely moved over the past decade). • Increasing costs of transportation • Need to protect IP Companies do not want to offshore their intellectual capital. • Onshoring more attractive in the UK New western regulations Better customer service • Need for incidental compliance, quality of service and customisation and configuration
  11. 11. 11 Thank you
  12. 12. "The changing balance between risk and reward will not see a rise in onshoring over offshoring" Rob Lees
  13. 13. “Offshoring and outsourcing today are like sex in the Victorian era: repressed or criticised in public discussion, much practiced in private behaviour.” Ben W. Heineman Jr. GE's former senior vice-president for law and public affairs. 13 Offshoring – It still makes sense
  14. 14. • In 2003, 40% of American and European outsourcing contracts involved offshore workers • In 2013 the number rose to 67%. • Number of employers intending to offshore UK jobs in 2013 has grown to 8 per cent, up from 6 per cent in 2012. • In the USA about 663,000 large-company jobs in IT, HR, finance and purchasing have been offshored since 2002. • More than a third of the U.S. jobs in those industries in 2002 will have moved offshore by 2016. 14 Offshoring – It still makes sense The Facts: Figure one: The Economist CIPD Survey Hackett Group EU and USA companies’ outsourcing contracts with offshore element
  15. 15. 15 Offshoring – Cheaper Labour Costs Manufacturing Labour costs (USD per hour, 2000 – 2008)
  16. 16. 16 Offshoring – Access to Labour US Companies in 2011 highlight employee skill shortages per sector
  17. 17. 17 Offshoring – The Apple Example Value Creation in the iPhone Apple (US) Basic and Applied R&D, Product Design, Commercialisation ARM Holding (UK) Chip Design NXP Semiconductor (Netherlands) Chips Balda (Germany) Touchscreen FoxConn (Taiwan) Assembly Value added
  18. 18. 18 Offshoring – The Apple Example Full year profit in billions of Taiwan dollars Apple gross profit pre product in billions
  19. 19. 19 Offshoring – Making it Work Many companies see offshoring as a quick solution to existing troubles. This is simply not the case. Offshoring a broken function will not fix it. Any offshoring activity needs to be undertaken after careful reflection of the below: Do not just consider cost when selecting a supplier •Consider all relevant factors: location, quality of labour, company culture, logistics. Analyse all relevant risks •Political instability, potential data theft, reduced employee motivation, increased costs as project progresses, potential of natural disasters, reliance on few suppliers, legal and regulatory risks. Treat supplier as an extension of your own company •Communicate, collaborate, help them reach your standards, innovate together. •Invite them to visit you and vice versa.
  20. 20. • Lower costs • Flexible Resources • Access to skilled labour • Location benefits Savings from a co-ordinated approach can be poured back into research and development. This is the kind of competitive advantage western governments should be campaigning for, not against. However, there is a caveat: Offshoring a function does not provide a solution to an existing problem. Businesses must treat offshore suppliers as an extension of their own brand. 20 Offshoring - Conclusion The benefits of well-managed offshoring are numerous.
  21. 21. 21 Thank you
  22. 22. "The changing balance between risk and reward will see a rise in onshoring over offshoring" Breakfast debate 15th May, The Centre Point
  23. 23. 4C Overview Breakfast Debate 15th May 2013
  24. 24. 24 About us Experience Our Team Established 2000 65+ in-house talented specialists Real Savings £62.6 million saved for clients in 2012 Delivering Business wide cost transformation
  25. 25. 25 What we do • Detailed assessment of realistic savings • Savings delivery roadmap and opportunity matrix • Benchmark database • Spend analysis • Team assessment • Sustainable, long- term benefits • Talented functional experts • Expert support functions • Bespoke tools • Tracking and monitoring tools • Locked in savings • Managed services Opportunity Identification Benefits Delivery On-going Cost Management What can I achieve? Demonstrating success and knowledge transfer Performance management
  26. 26. 26 Client delivery Client Target Savings £m Actual Savings £m ROI Oil & Gas 25.0 32.0 27.0 FMCG 1.6 2.8 12.0 Financial Services 1.4 2.3 4.0 Financial Services 1.0 1.1 1.0 FMCG 2.2 2.6 2.0 Leisure 1.5 2.3 8.0 Retail 8.7 9.6 23.0 Financial Services 8.0 10.0 4.0 TOTAL 49.4 62.6 8.3
  27. 27. 4C Associates The Kensington Centre 66 Hammersmith Road London, W14 8UD Www.4cassociates.com

Hinweis der Redaktion

  • Notes: Migrants’ wages have been deflated by the urban consumer price index. The data for 2012 refer to the first three quarters.Source: National Bureau of Statistics.The export sector is extremely concentrated in China’s coastal areas. Just 20 of the over 330 prefectures, accounting for only 13% of China’s total population, produced three-quarters of total exports in 2010. Enterprises in these areas rely heavily on workers who moved to these cities from other parts of the country and so the rapid rise in real wages has weighed on profit margins and slowed export growth.Indeed, growth in the top 20 exporting prefectures was nearly four percentage points lower in 2008-11 compared to their average growth rate in the seven years after WTO entry, with particularly sharp falls in 2011.
  • Notes for image on the slide:The cost of shipping a standard, 40-foot container from Asia to the U.S East Coast has already tripled since 2000 and will double again as oil prices head toward $200 a barrel, (Jeff Rubin, chief economist at CIBC World Markets in Toronto.)http://online.wsj.com/article/SB121331934552070357.html.htmlExamples of suppliers who are looking at rectifying this issue by onsourcing are: Ikea, Emerson, Desa.
  • Add in the table from the ONS data hereSince 2009 average nominal earnings of UK employees have remained quite flat. With ConsumerPrices Index (CPI) inflation averaging 3.7% in the 12 months to April 2010, 2011 and 2012, therewas a sharp fall in median earnings in real terms from their peak of £12.25 per hour (2012 prices)in 2009 to £11.21 per hour in 2012 – roughly the same as their real value in 2003. This may bebecause of pay freezes for people who remain in the same job or it may reflect changes in thecomposition of jobs that people do, with some high-paid jobs being cut as the economy adjustsfollowing the shock of 2008-09 and more low-paid jobs being created. The ‘average’ earningsoutcome for UK employees as

×