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Cost. The number one reason cited for moving overseas. Looking simply at overseas labor cost certainly supports this reasoning.
However, real costs are usually overlooked. What about the cost of returns and recalls due to poor quality? Or the cost of delayed delivery due to customs, freight or supply line problems? Or the cost to manage the overseas production…flights, hotels, jet lag, loss of management efficiency?
And the cost and time required to move operations overseas are often underestimated. This includes:
· Site identification and selection
· Construction of a new facility
· Screening and hiring labor
· Negotiating for and gaining government approvals
· Understanding and planning for currency exchange issues
· Travel/down-time
· Shipping, freight research and setup
· Duty and freight costs
· Learning curve with the local culture
· Negotiating with North American labor force
· Properly announcing the North American plant shutdown
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Most companies will realize a return on investment from automating a typical manufacturing facility within 18 months, and very often in less than a year. Contact "Save Your Factory" to utilize audit and analysis tools that examine the costs and timing related to both automating and moving overseas.
For all these reasons, you should consider saving your factory. |
