One of the commonest questions our western clients always ask us is the major advantages of manufacturing offshore, particularly in Asian countries. We answered this question in private over and over again, but it seems like it’s a never-ending question, so the Guide Location is putting the article to help our esteemed clients. We are very fortunate to have helped a lot of companies move their manufacturing to Asia, especially China and they have experienced great success in their new location.
When we see a question like what is the benefit and advantage of moving our manufacturing to Asia, we see it as two question fused together. The client is asking (1) why would we move production to Asia, and (2) what would we gain if we move to Asia.
Splitting the question into two like this will help to understand the need of the client, and provide a clearer and useful answer to him.
There are a number of benefits that can come from moving a production line to manufacturing components or doing a complete offshore product.
The main reason for offshore production is the costs. By outsourcing assemblies and other expensive manufacturing processes, you can dramatically reduce the cost of your products. This is great; after all, your goal is to eliminate as much cost as you can.
The goal is to stay extremely competitive. By chopping down on the cost of production as much as you can, you are cutting off competition.
Another great advantage is to circumvent harsh government regulation and policy. The western world has more stringent regulations than Asian countries in the treatment of labor, manufacturing process and climatic impact, etc. outsourcing helps you to go around policies like these and still be able to make quality products at a reduced cost.
Outsourcing to China, India, Vietnam, and other countries is nothing new. At Guide Location, we have helped many top-producing companies to pull off offshore manufacturing feat to create their products at comparatively lower prices for more than 23 years. They were successful and are still succeeding because they have a well implemented global supply strategy, thanks again to our help.
Investment, real estate, and hiring/training the right employees are expensive in the west. The purchase of machinery and the acquisition of factory space to complete assemblies are not cheap either. The hiring of the right people to operate and maintain that equipment is a further consideration. These are major problems that drive up the production cost in the west, and a potential lawsuit if you fail to follow strict regulation. In Asia, these are not significant issues. There are millions of cheap workforce ready to work longer hours with smaller wages the in the west. Plus governments in Asia are trying to woo investors and thus readily provide cheap resource and investor friendly regulation and policies.
Offshore manufacturing will save you money. But don’t just jump into it. Too often, we hear about business that have gone offshore in the past and appears to have found successes, only to have problems months later. With a presence in these countries, and well worked network guide location will greatly help you to find a strategic location for you to move your business. Guide Location is able to offer our customers a sense of peace by using our strategic business connections in Asia to ensure that we have our “feet on the road” at all times.
If you desire to cut the cost of cost and save money on your manufactured products and offer your customers a much competitive rate for your products, do not hesitate to use in offshore manufacturing to take advantage of the cost-saving benefits. With proper planning, the benefits of a global supply chain outweigh the risks.