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Thinking Global, Acting Global: Leveraging A Single Instance For Global Success

by Joshua Greenbaum, Contributing Editor

Posted on Monday, April 11, 2005 2:30:00 PM                                     

Ask a Fortune 500 manufacturer about the twin trends of globalization and outsourcing, and you're likely to hear a story ripped from the front page of the business section: the shift of manufacturing operations and jobs to overseas markets, the new efficiencies and lower costs that these very large manufacturers can command, and the ripple effect these issues have on the local and national economy.

But ask a mid-market manufacturer about globalization and outsourcing, and you're likely to hear the same story from a vastly different perspective. For manufacturers like Elliott Company, globalization and outsourcing have been a wake-up call for using IT to improve competitiveness and buck the front-page trends that have meant doom for so many other mid-market companies. "If you look at what has happened in our market, the large companies have purchased the smaller companies and consolidated them into very large global conglomerates," says Rick Wiegand, vice president and executive operating officer of Elliott Company, a mid-sized, global manufacturer of compressors and steam turbines for the energy industry, based in Jeannette, PA. "It means you're competing with people with a lot more leverage."

The leverage that top tier manufacturers have has deeply threatened mid-market manufacturers in the U.S. and other traditional manufacturing centers. The disappearance of almost three million manufacturing jobs since 2001 has been blamed in large part on outsourcing, and over half of the manufacturing executives surveyed by Deloitte Research last year said they had already outsourced some of their production to China, Mexico, and other low-cost manufacturing regions.

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