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Electronics Production | November 21, 2005

Kitron CEO: Don't just<br> focus on lowering costs

Making a business profitable is not just about outsourcing your manufacturing to countries with lower wages, but it could be one part of it. Kitron AB's CEO Jonas Eklind gives us his thoughts about outsourcing.
According to a report published in spring this year, “Alternatives to Outsourcing”, companies who are daring to invest in manufacturing in Sweden and keeps the development close to the production are often showing better profits than companies who are outsourcing its manufacturing. Jonas Eklind, CEO at Kitron AB in Sweden, appears to agree and in a chronicle published on evertiq's Nordic pages, www.evertiq.se, he talks about “intelligent outsourcing”. “This doesn't mean that every kind of outsourcing is bad or that the choice is either – or. Many companies both can and should outsource parts of its business but how they do it needs to be reviewed”, Jonas Eklind writes.

During the last five years Sweden has lost hundreds of thousands of jobs to “lower-wage” countries. Jonas Eklind claims that the companies have focused to much on just outsourcing and by that cutting costs. Intelligent outsourcing is according to Jonas Eklind keeping the design and development closely connected to the manufacturing. “The best total economy is formed by that you at an early stage are able to make strategic choices for the production of the product. For Swedish companies who by rights are famous for innovation and advanced products, this is particularly important”, he writes.

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