New Model for Competing in High Labor Markets
This paper has demonstrated that in many applications it can. However, as this paper also demonstrates, the critical success factors rely on addressing many subjects on many fronts.
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Authored By:
Tom Borkes
The Jefferson Project
Orlando, FL, USA
Summary
This paper presents the results of a study that challenges a widely accepted tenet of industry "wisdom". Specifically, the axiomatic claim that to be most competitive in the global high-tech electronic product marketplace, the assembly of the product must be done in the lowest available labor rate environment. This "given" is thought to be especially certain for high volume applications.
Conclusions
Can an electronic product assembler in a high labor rate market that sells labor for $37.93/hour compete with an assembler selling labor at $12.00/hour? This paper has demonstrated that in many applications it can. However, as this paper also demonstrates, the critical success factors rely on addressing many subjects on many fronts. Exploiting the automation, dismantling the traditional organization, changing the nature of the direct workforce, and challenging material cost are some of the areas requiring action.
Over the in the world in 2004. The opposite effect was exerienced in the former Soviet bloc country of Slovakia. As its EWF index continued to improve from the fall of the Soviet Union in 1989 to its independence as part of the dissolution of Czechoslovakia in 1993, its manufacturing output has improved as well. The Slovakian world ranking for manufacturing GDP as a percentage of total GDP has improved from 77th in 1975 to 30th in 2005.
Initially Published in the SMTA Proceedings
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