Manufacturing Executive - November 2008 - (Page 20) SUPPLY CHAIN politicians led the rebellion, as finance minister Peer Steinbrueck assailed what he called “caravan capitalism,” and the head of the Social Democrats party Kurt Beck made a public display of banning Nokia phones from his home. Trade union IG Metall called Nokia’s move a “scandal.” If nothing else, Nokia “paid huge social costs,” says EKNOWtions’ Kent, who is also a European Leadership Team member for manufacturing industry organization the Supply Chain Council. Other factors might also cause manufacturers to think twice before relocating to Eastern Europe. Risk and stability issues will enter into their decision. Certainly, Russia’s incursion into Georgia in August reminded manufacturers of company, run by architect David Fisher, crafts individual apartments and hotel rooms in a factory near Bari, Italy, and transports the prefab units via container ship for final snap together in Dubai. Fisher points out that prefab crafting marks a long overdue change to onsite construction processes dating back to the Egyptian pyramids. He claims his approach ensures “quality you could never achieve on a construction site, which are a mess all over the world.” And he says that he could not assure that quality far from home. “If you’re manufacturing something like a Ferrari, you don’t make it in China,” he says. A THIRD OPTION R And then there’s a “third way” in the offshore versus onshore debate. Some European comSome European companies, such as Airbus panies, such as Airbus and German car seat and German car seat maker Recaro, are maker Recaro, are keeping production in their home territory, but handing it off to keeping production in their home territory, another manufacturer. For pan-European Airbus, that means selling but handing it off to another manufacturer. some of its European subassembly plants, as it the possible hazards of venturing out. And mandid in September, when it agreed to sell its Filufacturing executives contemplating setting up ton, England, wing operation to British engineering shop in Bulgaria might have paused — if they company GKN for £136 million (see Starters, p. 8). hadn’t already — when the European CommisThat followed a similar deal in August, when Airbus sion in July cited the country’s corruption and agreed to sell its Laupheim, Germany, cabin comorganized crime in its decision to curtail hunponent facility to German-French joint venture dreds of millions of euros in aid. Diehl and Thales. At the time, Airbus CEO Tom The volatile state of oil, natural gas, and Enders said the move “will further strengthen our geopolitics is hard for manufacturers to ignore. ability to concentrate on our core business while at Even if a country is stable, international transthe same time creating a strong supplier for major port entails unpredictable risks. Thus the Supply cabin components.” Chain Council early this year added risk manBoth sales were part of an overarching plan in agement assessments to the latest version of its which Airbus is trying with varying success to SCOR supply chain assessment model. sell other subassembly plants as it copes with deAnd, as AMR’s Tohamy and O’Marah note, lays in its A380 project. some manufacturers will cite quality concerns as In a similar but less drastic tack, German seat a reason to make goods at home. maker Recaro last year agreed to outsource partial One European manufacturer that is keeping assembly to DHL Exel. At first glance, Recaro’s production squarely on European shores is move seems to defy the common wisdom that recBritish prefab apartment, condo, and hotel builder ommends keeping core competencies in-house Rotating Tower Dubai Development Ltd. The while handing off other functions to outsiders. And, in fact, the outsourcing deal is proceeding ESOURCE CENTER slowly. Recaro’s customers are balking at the switch, which consequently has yet to take hold. ARTICLES: But Recaro is confident it will swing into action by Creating the One Enterprise early next year. Recaro’s “core” is as much about www.managingautomation.com/integrate design as it is about manufacturing, so outsourcing Managing Outsourcing: Ensuring Quality some aspects of assembly made sense for Recaro. Across Oceans For a manufacturer like Recaro to outsource www.managingautomation.com/managingoutsourcing manufacturing seems counterintuitive, possibly As the Call Center Turns even maverick. But when it comes to offshoring www.managingautomation.com/notes46 production, maverick thought will always play a Boeing’s Big Supply Chain Wager role — even if the mavericks can’t always go www.managingautomation.com/boeing home again. ■ 20 November 2008 http://www.managingautomation.com/integrate http://www.managingautomation.com/managingoutsourcing http://www.managingautomation.com/notes46 http://www.managingautomation.com/boeing
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