Essay About Potential Of Indirect Costs And Manufacturing Job

Outsourcing Of American Manufacturing Jobs
Essay Preview: Outsourcing Of American Manufacturing Jobs
Report this essay
A machinist goes into work just like he has been for the past 20 years; suddenly he is told that
his job has been eliminated. If you think that your manufacturing job is safe, you would be
wrong. Throughout your working career there may come a time that you will lose your job or
have to change careers due to outsourcing. What is outsourcing? Adams (2006) states, “True
outsourcing is nothing more that shifting a companys non-core function to a third party which
makes those functions its core competency while delivering economies of scale” (p.1, para 5).
Companies in the manufacturing sector are resorting to the outsourcing of American
manufacturing jobs without taking into consideration the potential of indirect costs that may
come with it.
There are many indirect costs that come with the outsourcing of manufacturing jobs that are
not taken into account by the white-collar workers. For instance, the quality of product could
decrease due to lower technology and un-skilled workers. There will be an over abundance of
inventory due to the long lead time that is needed for a buffer because of long shipping times.
Another large cost is that of the need of a holding warehouse to store imports for inspection.
Please see List 1 for more outsourcing losses by Adams (2000).
List 1:
Outsourcing of Jobs 3
Outsourcing of jobs is creating concerns with the impact that it may have on the economy of
the United States. Gnuschke, Wallace, Wilson, and Smith (2004) stated that:
In the absence of strong job creation, the weak labor market and the prolonged economic
recovery have generated an enormous amount of concern about the outsourcing of production
and jobs to other countries. If the economy had expanded rapidly and started creating job
opportunities after the recession ended in the fall of 2001, the intensity of concerns about
outsourcing would have been swept away by the euphoria of the economic expansion. Since
job creation has been nonexistent since 2000 for most areas of America, it is understandable
that American workers, businesses, and government officials are increasingly concerned
about the welfare of the U.S. economy (para 1).
There are those that think outsourcing is good for the economy; that it helps the United States
by keeping white collar jobs and moving more of the service jobs overseas. In some ways they
are correct. However, this is not true when it comes to American manufacturing jobs.
People whom agree with the outsourcing of American manufacturing jobs believe that it
could help the economy by causing an increase in higher skilled labor and move the lower skilled
labor overseas. They are wrong; by moving these American jobs it would cause an increase in
unemployment and welfare benefits for the government thus hurting the economy. The
government would also have to supply grants to the workers to get a higher education because of
the costs involved. If the government does not supply these grants the blue-collar workers would
be forced to spend thousands of dollars that they do not have to seek higher education. After their
schooling is completed the workers then have to hope that the career they chose is not being
Outsourcing of Jobs 4
outsourced. What will happen to that 55 year-old machine operator; will he go to school
being so close to retirement?
In the United States today, outsourcing is only acceptable when used by companies that do
not import or export product and only transfer information. For example, a financial institution
would benefit because of the mother company being located in another country saving operating
and overhead costs. However; when it comes to manufacturing jobs, there are many changes and
new process that can be developed that would decrease cost and prove that the outsourcing of
American manufacturing jobs is wrong.
Before I go into the different process that can be performed at an organization to decrease
cost I would like to share a Hollywood version of eliminating outsourcing that is within the
movie Willie Wonka and the Chocolate Factory. In Lean sigma part V: lessons