Title: Offshoring benefits are fading away, is this the time to go home?
Task: Discuss and analyse the following statement, giving relevant examples:
‘Offshoring of business activities was seen as the answer of saving many businesses earlier this century. It has now become apparent that this may not be the case after all.’
The principle of offshoring is outsourcing the manufacturing process or consumer's service to another country. Offshoring of business is not new. This idea starts becoming a trend after World War II. 'These industrial migrations accelerated since World War II: steel, shipbuilding, automobiles, manufacturing, textiles and apparel, consumer electronics, tool making, semiconductors, and others.' Quote from Erran, C & Paul, T 2005. These are all the common jobs and manufacturing process in businesses have been offshoring. Offshoring have seen could provide a lot of benefits to businesses such as lower labour costs, lower tax rate, higher efficiency, etc. However, Nowadays people starts question about is offshoring a perfect solution to save businesses.
According to Sydney Morning Herald’s article - natural disasters more likely today, natural disasters have multiplied worldwide more often since 1950s and the frequency are expected to increase due to global warming. Offshoring means each kind of processes in the businesses’ production line is spread in worldwide instead of all locate in country. Materials need transportation travel from one site to another. This could increase the probability of cutting off the production line by natural disaster and geopolitics. In March 2011, the Japan tsunami and earthquake caused a lot of Japanese factory shut down and caused cut-off of supply chain, for example, Apple’s iphone4 manufacturing process was affected and some new car’s colour was restricted.(Peter V, 2011) Another example happened 7 months later after Japan tsunami. Thailand was suffered the biggest flood in their...