Some companies increasingly are turning to offshoring production in an effort to reduce overhead costs and increase profits. Offhsoring has appeal because the cost of labor is usually greatly reduced when production occurs outside of the United States. However, there are several pitfalls of offshoring. Some examples include:
- Complications with supply network
- Instability of foreign government/currency
- Language barriers
There are other ways for a company to increase efficiency which will result in increased 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 in an effort to explain that offshore production is not always the most cost-effective approach to reducing overhead. Please click here for more information.
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