MFG 2.0

Indian Offshoring...To Ohio?

Just read an interesting press release out of Cincinnati about India-based IT services firm Tata Consultancy Services opening up a facility down there.

From the release:

TCS yesterday hosted a grand opening of the new facility, which includes 200,000 square feet of office space and can accommodate up to 1,000 TCS associates, most of who will be locally hired from the region and its universities. The facility will serve as the primary software development and delivery center for North American customers. In addition, the campus will also showcase TCS Innovation Labs, customer network operations centers and briefing centers.

As wages inflate in India and China and the dollar falls against pretty much every foreign currency on the market and the corresponding comparative advantages of the international talent marketplace ebb and flow with the global trade winds, we may actually see an influx of manufacturing jobs of all sorts coming back into the U.S. -- just probably not the same jobs, and definitely not under the same corporate umbrella from which they left.

I've read that the relentless march toward outsourcing/offshoring has turned many manufacturers into basically brand names wrapped around a number of behind-the-scenes service providers and offshore contract manufacturers. And sometimes, even the decisions about what to outsource where is itself being outsourced. Russ Pass of Bridge Strategy Group made this very point during an interview I did with him for a feature story last issue:

"(Manufacturers) will likely be looking to their outsourcing provider to figure out the tactical aspects of the overall strategy, says Pass. "Not only are you going to outsource the function, you're going to outsource the decision about where that function will be performed," he says. The result? Increased competition for customers and talent between firms like the U.S.-based EDS and India's Infosys that will change the global game even further.

I think one thing TCS (and Wipro, who made a similar move to hire domestic U.S. IT workers at a new facility last year) are demonstrating is that like their manufacturing clients they, too, understand the value of being close to the customer. Meanwhile, EDS is working hard to try to capture market share offshore. In the global village, and especially in IT where the commodity is so easily transmittable, the whole question of "turf" is irrelevant.

But whatever the situation globally, one thing's for sure -- here in Ohio, we need the work.

TAGS: Innovation
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