Offshore manufacturing has become a business practice that has been on the rise in recent times. Any manufacturing that occurs in a country different from the company’s country of incorporation is considered offshore manufacturing. India and China are the two largest countries that companies turn to for overseas manufacturing.
Companies move overseas with the intentions of saving money. The logic behind offshore manufacturing is that labor is cheaper abroad. Cutting down on labor costs while maintaining the retail price will increase the company’s profits. It seems as though this is an easy overhead cost reduction move; however, there are many other factors and complications to take into consideration that will also effect cost, including:
- Different regulations
- Longer shipping time/higher shipping costs
- Instability of foreign currency/government
and many ways in which a company can reduce the overhead costs, while not resorting to offshore manufacturing.
Save Your Factory is a site sponsored by FANUC Robotics that is dedicated to encouraging manufacturers to keep their factories in the United States. Save Your Factory offers cost effective ways to increase factory efficiency, which reduces overhead. They also offer case studies that demonstrate the pitfalls of offshoring.
To learn more about Save Your Factory, click here.
The concept of lean manufacturing began in the automotive industry about 50 years ago, and has since helped companies of various backgrounds reduce overhead costs.
Save Your Factory, sponsored by FANUC Robotics, the world’s leading supplier of industrial robots, encourages manufacturers to fully and objectively analyze the advantages of lean manufacturing and other factors before deciding whether or not to outsource overseas. Click here to learn more about lean manufacturing through Save Your Factory.
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