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These articles are from the Six Sigma SPC Newsletter and other publications. All articles written by Jim Winings

Nov-Dec 2004

This is an article that original appeared in our newsletter This is a modified version of that article with additional information.


Since '9/11' the world economy seems to be slowly improving, at least for certain sectors. Any country that had a decent economy, apparently was affected, at least some what,  by the WTO, (World Trade Organization) rules. The US has lost millions of jobs to overseas countries where labor cost are cheaper. Of course, in some cases, the quality of that work is bad to poor, but not always. The key is to find cheap labor without the tradeoff of worse quality. But, some businesses don’t seem to care about the quality, as long as the market price of their stocks goes up, they are happy, as are the share holders, but in the log term, to what price.

Outsourcing in this country has increased so much that Lou Dobbs of CNN’s Money has a list of confirmed companies that are exporting jobs, in a weeklong series that he ran on his show. For a list of companies that have exported jobs click here and then on the 'Exporting America' link on that page. There is a web site called outsourceoutrage.com, courtesy of the Communications Workers of America, (AFL-CIO, CLC.). Sometimes when doing this, you fail to meet the customer's requirements.

On January 8th 2004,  Levis Strauss & Co. stopped making their jeans in the U.S. It closed the last 2 plants. A 150 year tradition lost. Wal-Mart is putting in a big super store in one of the towns that should employ about the same number of people that got laid off. That’s the good news, the bad news is the people at Levis Strauss & Co. was making about $14.00 per hour and Wal-Mart will be paying $8.00. The reason, it is cheaper because of labor, overseas.

We just purchased a Black & Decker sander. We were looking to purchase the 4 Sheet Palm Sander, but they appeared to be out of stock in the hardware store we went to. So we purchased their new 1/4 Sheet Finishing Sander instead. Got it home, opened it up and I noticed that the place where you put the sandpaper was not level. The plastic piece was warped. Now this thing wasn't a little off, there must have been at least an eight of an inch difference. So my girlfriend said she wanted to try it anyway just to be sure. And sure enough, one corner of the sandpaper was destroyed and the center of the sandpaper was literally untouched. So I called Black & Decker and they said that the models they had at the customer support center were not that way. So we took it back to the hardware store we purchased it from, and while I personally would not have purchased another one, my girlfriend decided to after we stumbled onto the one we were originally looking for, in the wrong place. So she purchased the 4 Sheet Palm Sander. Well, I checked it before we bought it, and it was a little off, but I'm hoping not enough to make any difference.

I have always had a great respect for Black & Decker, but that respect has been tarnished some because of this experience. I mean, it was cheap enough, but after we spent time inspecting it, testing it, and returning it, and then inspecting the new one, well that adds cost onto the purchase. Of course since it was our cost and not Black & Decker's, they are happy. It's cheaper and more convenient for them to have us return the product and then have it reworked overseas where labor is a lot less.

Now, I can reckon, and you don't need a Ph.D. to figure it out, that the companies that are Six Sigma and exporting part of their operations, and/or using suppliers more frequently than in the past from some of the newer trading countries, I'll just bet that all the smaller companies in these new trading partner countries there, if not most of the larger ones as well, are not six sigma trained. What do you want to bet? So, is Six Sigma out the door, or are they going to train all these people in it? How much will that directly cost?

The theory, so we've been told, is that it will make products cheaper to purchase. And indeed it has. less expensive and a lot lower quality. But, let us presume that the quality gets better as time goes on, just as the quality of stuff made in Japan in the 50's was a lot less than it is today, and the prices stays low.  Everything is much less expensive because labor is much cheaper overseas. Much! People overseas can make  for a weeks' or sometimes a months' worth of work, (and usually not five, 8 hour days), what the same US worker gets a day. There is a reason for that of course.

Not every company can outsource successfully. They may all think they can, but here are some examples of outsourcing done poorly.  Communications is a key problem for the companies that do it wrong. Let us take SBC/Yahoo® for an example.

We have SBC/Yahoo® DSL as our ISP, (Internet Service Provider). So I went and purchased a router and set-up my LAN. Everything was going fine. Then all of a sudden, my email stopped working with Microsoft® Outlook® Express. When I ran the program from SBC/Yahoo® to trouble shoot the problem, it crashed. Ok, time to call 'tech support'

SBC/Yahoo's call center is located in India. No problem with that, the people were very courteous, but not very knowledgably about the mechanics of the internet and email servers. As with all call centers, no matter where they are located, the first people you talk to just have a check list with solutions to the most common problems. A script as I like to call t hem. I don't know about you, but I NEVER have a common problem.

After the person insisted that I do through a variety of system changes, that I kept insisting wasn't going to fix the problem, I finally asked to talk to a supervisor. They agreed, went to get one and came back and said the supervisor was busy with someone else and could I wait. I said all right. This was the first sign that something was wrong.

After about 15 minutes, the same person came back on the line, (not the supervisor), and said that I had to 'opt out of port 25 filter'. So they cave me instructions on how to do that. You had to fill put a form online. So I did, and when I pressed the submit button, after a few seconds the screen went blank, and the information was never sent. I tried for 8 hours to opt out of port 25 to no avail.

So I called again. After 5 minutes of explaining to the new support person what had transpired thus far, They gave me the direct email address the for was sending to and told me just to send them email. But they were busy and it would take a day or so. After 2 days, and Outlook still not working, I started playing around with Outlook and trying various things.

After a while I found that there is a second place to put a username and password. I had to put my SBC/Yahoo account name and password in to be able to what is called mail relaying.

It doesn't matter if you are implementing Six Sigma some form of ISO or QSM, if you cannot communicate what is going on to your outsourcing partners, you are not going to make it work and have any customers left when you finish.

 

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Last Updated: Sunday, 11-Jun-06 07:19:08 PDT