A manufacturer, eager to save money, bought parts from a developing nation. Finding many unusable, he hired temporary workers to examine them and discard those not meeting his standards. Hearing his customers speak of the recently poor quality of his product, the manufacturer asked a consultant what was wrong. The consultant split his fee with a professor at State U to produce something the consultant could give the manufacturer. The professor purchased a paper from a service that outsources writing to the third world. The manufacturer paid the fee, ignored the report, and prospered, because his product was cheaper than his competitors. The moral is, with globalism everybody wins.
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My little fable is fictional, and a caricature at that. Mark Graban looks at a related real-world phenomenon in GM to try to Inspect Quality In After Letting Experience Walk Out the Door:
As with many business decisions, such as outsourcing or offshoring, the “savings” or “benefit” from such a move is easy to calculate. It’s easy to calculate the savings from paying workers $14/hour instead of $28/hour, even considering the buyouts and “go away” payments to departing workers. But the COSTS are much less easily quantified.
The Detroit News (quoted in Graban’s post above) shows why executives should let the PR guy talk to the press:
The biggest challenge for GM may be accomplishing the massive undertaking without compromising the quality of its cars and trucks. Having begun to win new respectability on the quality front, the automaker can’t afford costly and reputation-marring mistakes on the factory floor, which is a risk when there is significant turnover.
“We are very intensely focused on making sure our quality isn’t compromised,” said Joe Mazzeo, GM’s executive director of manufacturing quality. “Our customers don’t know this is going on, and they don’t care.” — GM preps for new hires after buyouts
To avoid “reputation-marring mistakes” in front of the microphone it would be better keep an experienced PR guy on staff. I bet that’s one function GM executives think is worth top dollar. Well Mister Mazzeo, some of your customers do know this is going on. Whether they care or not we’ll see.