Offshore manufacturing is a growing trend in recent years. Many companies choose to send their production overseas for the purpose of cutting down on labor costs. China overseas sourcing and India overseas sourcing are the two greatest trends in offshoring. This is what they turn to as a means of reducing overhead costs to increase bottom-line profits; however, moving the manufacturing process to a foreign country can significantly complicate the management process.
Save Your Factory, sponsored by FANUC Robotics, the world’s leading supplier of industrial robots, warns businesses to fully analyze offshore production before deciding that it is the best option. Save Your Factory maintains that there are many pitfalls of offshoring, including:
- Supply network complications
- Foreign government/currency instability
- Language barriers
Additionally, they urge that there are other ways for a business to reduce overhead costs through improved efficiency while maintaining manufacturing in the country of incorporation. Improved manufacturing efficiency will lead to increased profits. There are numerous ways to reduce overhead, but two popular methodologies include Lean Manufacturing and Lean Six Sigma. The end goal for each method is to reach a quality product through efficient processes.
Save Your Factory has also analyzed the advantages and disadvantages of offshoring costs and has concluded that offshoring is not always the most effective solution to lowering costs. Please click here for more information.
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