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Global sourcing used to be about costs. Now it's about everything else, too. BY GAIL DUTTON
"Made in America." The imprint means innovation, high quality, safety and reliability. So why should companies even consider exchanging that stamp for "Assembled in USA" and components manufactured in other nations? Not so long ago, the main reason was to gain lower prices for labor-intensive goods. That's still a good reason, but there are several other circumstances in which "Made in America" isn't the best choice. Here are ten, culled from the experience of Mark Thompson, global commodity leader at Pioneer Hi-Bred International, an international leader in plant genetics.
Material is available only from global sources
Swiss pharmaceutical giant Roche experienced this a few years ago to produce the flu medication Tamiflu, which at that time, was the only medication effective against the deadly H5N1 strain of avian flu. A key ingredient of Tamiflu, shikimic acid, is extracted from wild star anise, which is only available from four provinces in China. Star anise from other countries provides lower yields and inferior purity, according to Roche spokesman Darien Wilson.
For a historical example, consider diamonds. Once found only in India, nearly 50 percent of the diamonds mined today come from Africa, although significant deposits are being mined in Brazil, Canada, Australia and Russia. The U.S. has no reliable source of industrial or consumer-grade diamonds. (Colorado's Lake Kelsey diamond mine opened in the 1990s with sporadic operations, and Arkansas boasts a public diamond fieldCrater of Diamonds State Park near Murfreesboro, Arkansas-that has yielded some multi-caret stones.)
Sometimes the issue isn't materials, but expertise and geography that can't be found in the right combination in the U.S. Ireland, for example, has become a primary location for call centers, especially for European operations. The country is attracting a young, multi-lingual population of native speakers that can serve all of Europe and much of America during normal business hours before handing off calls to their North American counterparts.
Call centers are tapping into linguistic expertise, while technology companies are accessing high level scientific knowledge. With the economic collapse of the Soviet Union and the Warsaw Pact nations in the early 1990s, many Eastern European scientists who had been assigned to government-funded, generally defenserelated...