Companies are constantly looking for ways to reduce overhead costs in an effort to increase bottom line profits. Some companies have looked to offshoring as one way to reduce costs. Two main reasons that offshoring has appeal include:
- Decreased labor costs
- Quick turnaround time
The two above points are very attractive to businesses looking for quick fixes to increasing profit; however, there are several pitfalls of offshoring. Some examples include:
- Complications with supply network
- Instability of foreign government/currency
- Language barriers
Additionally, there are other ways for a company to increase bottom line profits while maintaining all parts of a business in the country of origin. Two popular methods of decreasing overhead include Lean Manufacturing and Lean Six Sigma. The underlying principle is that the quality of the product needs to be maximized by efficient processes.
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. Save Your Factory analyzes the benefits and pitfalls of offshoring and provides case studies as real life examples. Additionally, Save Your Factory has 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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