It may be premature to dub Alabama the new China, but this Sunday news item from Supply Chain Digital editor A. Selway Ryan gives credence to the notion that U.S. companies are not the only ones eyeing the American labor force.
In previous posts, we’ve noted that bringing outsourced manufacturing jobs back to America is a key plank in the Obama administration’s platform; and that states like Georgia are passing legislation to encourage the manufacturing sector to reestablish operations on domestic turf. Now comes Alabama which, as Ryan’s title notes, “puts the out in outsourcing” with a new agreement that has Chinese manufacturing companies establishing factory operations in the state. Ryan’s quote from SoZo Group CEO Raymond Cheng says this may be a harbinger of things to come:
It is a natural evolution that as Chinese companies grow into global brands, they will come to the U.S., the largest consumer market in the world.
Bringing production closer to the consumer enables manufacturers to more effectively control efficiency and quality in the supply chain. The oil costs alone for China to export goods to the U.S. probably makes the business case for moving operations to America. Combine that with the 600% increase in wages for Chinese laborers, and the pieces are starting to make the prediction by investment strategy expert Jay Pelosky we referenced back in March look very, very accurate.
Pelosky was also the one who quoted the jobs multiplier effect of manufacturing jobs — saying that for every one job in this sector, close to another three were created (100:291 was his actual ratio), and this is where the opportunity to employ people with disabilities comes into play. Especially if economist Daniel Meges was correct in his assertion that manufacturing operations will remain nimble; choosing to outsource other segments of the supply chain instead of bringing them in house. Contract services organizations that employ people with disabilities to perform assembly, packing, and sorting duties can help companies keeps costs under control while providing an opportunity to make life matter for individuals with disabilities.
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Image by Hanan Cohen, used under its Creative Commons license.