Outsource locally: manufacturing networks.

• Author: Walker, Jesse
• Position: Brief Article

THE MANUFACTURING Alliance of the Red River Valley is a flexible manufacturing network: a collection of small firms that both cooperate and compete, working together on projects that no single member could complete alone. The alliance seeks out contracts from Boeing, Caterpillar, and other companies, then distributes the work to its members, whose close proximity --they're all in the Rockford, Illinois, area--allows them to easily collaborate.

In effect, this stands outsourcing's image on its head, sending work to local enterprises rather than abroad. That's an attractive idea for the Rockford region, which has lost almost 14,000 manufacturing jobs in the last decade.

The organization is only two years old, and it's hard to predict how well it will succeed. But such networks have already proven profitable elsewhere: They dominate the economy of Emilia-Romagna, in northern Italy, and have a foothold in several other parts of the world, most notably Denmark.

In Emilia-Romagna, around 90,000 manufacturing enterprises, frequently family- or employee-owned, will collaborate as needed, forming ad...