CLOSING THE COMMUNICATIONS GAP
Chip maker AMD decided to build its low-power and space-saving SeaMicro servers just down the road from its corporate headquarters in Sunnyvale, Calif. For AMD, manufacturing in the U.S. is about control over the process and avoiding potential communication issues during system manufacturing that can hurt the quality of a product.
"AMD's decision has provided a tremendous advantage in time to market through engineering agility and has created hundreds of high-paying manufacturing jobs in Silicon Valley," said Dhiraj Mallick, corporate vice president and general manager, data center server solutions, at AMD, via email.
That engineering agility can translate into huge productivity gains. Companies can build, test and innovate products and go to market faster when developers are co-located, said Scott Staples, co-founder and president of Americas for Mindtree, a global IT and product engineering company.
Mindtree, with headquarters split between Warren, N.J., and Bangalore, India, specializes in helping companies outsource jobs, often overseas. It has 13,000 employees in Bangalore alone, with many of its customers based in the U.S. But it recently has turned to reshoring, returning 400 engineering jobs back to the U.S. in Gainesville, Fla. Three more so-called U.S. Delivery Centers will soon follow here in the U.S., Staples said.
Reshoring Initiative's Moser said the other side of the reshoring story isn't just about returning manufacturing jobs. For the high-tech industry, it's about returning information technology jobs, business process jobs and thousands of call-center jobs that have migrated overseas.
Staples said that instead of chasing-the-sun software development, Mindtree is pitching its clients on working more closely with developers either one-on-one or at least in the same time zone. "Yes, salaries are cheaper overseas, but engineering cost is not always the driving factor," he said.
Mindtree also is reshoring its agile software development to Florida. Agile software development is an approach to software creation based on incremental development that requires close communication between developer and client. A tight feedback loop, at the end of the day, can be more cost-effective than juggling time zones and flying management from country to country to oversee development, he said.
Agile software development also can reduce development time significantly and improve quality of the end product, Staples said. That idea has the growing support of economists and business leaders who say industries that produce complex, high-tech products benefit from keeping employees close. Clusters of manufacturing and development allow ideas to more naturally flow and increase productivity and innovation.
San Jose, Calif.-based solution provider and server maker Supermicro told CRN it balances the offshoring trend by heavily expanding integration, service and support capacity in the U.S. "We are investing in the future by expanding our presence in the U.S. This encompasses investment in R&D primarily and the recent acquisition of additional space in Silicon Valley," said a company spokesperson in a written statement. Supermicro recently paid $30 million for the old 36-square-acre campus of the San Jose Mercury News.
NEXT: Protecting The Supply Chain