Is Offshore Manufacturing Cheaper?

My dear

Never mind any reason except earning money. Business is business.

you didn't mention about getting ripped off by having the chinese steal all your IP, faking your own goods, and then selling them back on your own market.

that's not too good for your bottom line.

It is a dangerous business practice because it puts you at the mercy of 'someone' who has not necessarily got your best interests in mind. There's a lot to be said for a little self-sufficiency! Plus, as mentioned, there's the risk of...

We had one customer who decided to look at the total cost of a part manufactured in China and found that they should add 33%-50% to the Chinese price to make it equal to the US price. The difference included the cost of sending US personnel to get the Chinese process acceptable, the cost of expediting shipping replacement parts when parts were rejected, and the cost of extra Quality control over a Dock-to-Stock qualified vendor.

I would love to hear the results of others who have done similar studies.

"I would love to hear the results of others who have done similar studies."

I would love to hear the results IF others have done similar studies. Which I very much doubt in the majority of cases. The rush to get 'er done cheaper probably mitigated against logic for most manufacturers. I wonder if/when Wally World will see the error of their ways?

How do you put a cost on jobs being lost over profit? Also the profit is usally for a few at the expense of many. I was at a recent trade show in the Seattle area that had a few companies representing over sea manufactures and it was really sad I must say...I am just wondering what your thoughts are, and quite possibley I am missing something??

WELCOME ABOARD!!!

If you think about it, sending our national manufacturing capability off-shore decreases national security because we are then beholden to whichever nation makes what we need. It also ruins us economically, because no matter how much more cheaply the goods can be made elsewhere, no work here means no paychecks here, so who will buy those goods at any price? It's a slippery slope we've got ourselves on, indeed. And while he may have been somewhat dodgy on a lot of things, H. Ross Perot was spot on when he identified that "loud sucking sound" - the sound of jobs going overseas...

I believe the problem is we all buy into the conventional logic that it's cheaper overseas. We can preach patriotism, but I've never seen that logic phase a purchasing guy (or CEO). If we show that it's more profitable to keep the work in the US then we can win the argument and the work.

Welcome aboard. I scarcely believe it's possible to both outsource work AND save local jobs. To me, that's a mutually exclusive proposition. Have you any proof?

I would bet the only proof is the bottom line! I see he is from Canada, they always have thought that way. Two of the gentleman at the manufacturing show in Seattle where the only ones offering outsourcing to other countries and they both were Canadian companies. No US manufacturing company was offering off shore work and all were very mind set that there products were made in the US and going to Stay in the US. Then again it is one thing if your making brooms and another if your building technology

It is not only a question of "can it be made cheaper", it is even more a question of "can it be made to an acceptable level of quality". It does not matter that it costs half as much, if it breaks and must be replaced twice as often, where is the savings? An even greater loss is in the trust and confidence of your customers. Proven reliability and capability must be shown before cost reductions can be considered. And then there's that nagging question of "if they decide they don't like us, we can't get any more"... Not a happy thought, eh?

"THEN NO JOBS WILL BE LOST!"

Sorry, to me that just sounds like another claim to perpetual motion or 'free' energy. If a product's components were made here and now are not, the jobs associated with those components are lost. They can't all go on to assembly of the product, no matter how cheap the components have become; there's only a market for so many of the products, no matter what it is.

And I will never relinquish my grip on the need for self-reliance in most if not all industrial sectors. We don't have to make all of everything that we use, but we need to be able to make at least some of everything. As it now stands, there's probably not a single textile mill in the entire country that can make a pair of socks. SOCKS, for crying out loud! As simple as that is, we have to import them ALL?!? Wrong thinking, folks...

Ummm...the company I work for is engaged in construction, and any offshore work we do is done there by us. So, no, you won't do me or mine any good at all. What I think is that you will do the collective "us" a great disservice by encouraging what I personally view as a counterproductive process. If all you love is money, then you have a poor life indeed. I have but pity.

rgoencz

I am afraid Enviroman is right on, you can not just put a dollar on the whole picture.

You keep saying you have other items to offload name a few? I have a very good friend who started his manufacturing business in 1978 with one Bridgeport. He now employees 60 people who all have great benefits, pay and quarterly bonuses. Yes even his company janitor gets paid well and the bonuses. No one has left the company due to pay. He does out source some work BUT it is other companies in the US and most in the same area. His wisdom has been this in order to grow his business.

1. Employees, 2. Customers, 3. Vendors, 4. Himself

Gosh what a thought great employees with great attitudes putting out great work and not one item sent to another country to be made. I believe we could make socks here and brooms you just have to help someone do it that does not have the way. This man does not put a value on a dollar over his employees and in return it has made his company what it is today and always will be without leaving the country. He also came here from another country and could very easily send his gadgets to someone out of the US to make but never will, but find someone or help someone make them in the US. I wish he could but only talk to anyone outsourcing their work and show them the the way to become successful at home. But then you will always have the person that puts a dollar over a person or family. But that is something they will have to sleep with!

Hi to everybody, so I think to understand the answer to my question "why US customer don't buy in Italy" I entered in a thread some days ago!

Unfortunately I did not read this one before!!!

US don't buy abroad because of they are not sure about the foreign quality, you are not sure about the actual saving in a foreign quotation but first of all you prefer to buy in US to keep money in the United States' money box.

Everything is correct and I can see that but don't you think in a global economy everybody has the right to work abroad?

I come in US often for marketing campaigns and even if somebody told me my firm don't sell there because of our bad website I am sure that the agreed preference to US supplier is the strongest cause.

It's sad but I will work harder to show US customers the truth: they can find the same quality and the same standards, they can spend less money (CIF)...if only they were okay to spend their money abroad!

I think it's really much more complicated than that. But in the past few years so much of U.S. industry has sent jobs off-shore that it makes some of us wonder who is supposed to buy these products, despite how cheap the labor input is, if they don't have jobs with enough salary to afford the products.

How many people do you suppose are willing to work abroad for 1/10 the salary and no linguistic skills on their side? Yet if as in the past those people's grandparents came to America, it was for 10X the salary, and they could often take decades to learn English (and some never did).

Hi Rgoencz, I have read your interesting comments. I had initiated a thread on "Made In China MNC branded products" around 50 persons participated in discussions. I dont know if you had also commented. O.K, now I would like to breif you that I had bitter experience with "Nokia" cell phone, "Black & Decker" Auto Toaster and "HP" Printer all made in China. Can I assume you feel that only simple scubcontract mechanical parts such as conveyor rollers etc can be sent offshore?. Then I can agree with you. But if products refered above are made in China and not as per parent company's standard then I dont think they should be sent abroad till the country who is like a vendor is capable of offering products as per parent company. I hope you will agre with me.