When to Manufacture Overseas

With seemingly endless arguments for and against overseas manufacturing, here are a few tips to help form your own opinion for your product.

Overseas Manufacturing

Why is an American manufacturer writing an objective blog post on overseas manufacturing? Making American companies successful is our mission.  Helping you understand your options is a big part of that. Learn more about what we do here.

Many companies, large and small, face the decision of where to have their products manufactured. Understanding your target market, product design, and having a solid business plan will generally make that decision for you. Here are some things to consider:

1. What are your target market’s priorities?

No matter if your customers are internal or external, get an idea for what they’re looking for  as far as quality, price, and delivery timeline.

2. What are your quantities?

Many times, there are minimum order quantities (MOQ’s) that must be met before a manufacturing facility will accept your order. Are your quantities providing you with the ROI necessary to justify the lead times and logistics of manufacturing overseas?

3. When must you deliver?

Lead times can be several months when manufacturing overseas.  During certain times of the year, production may halt in observation of foreign holidays (example: Chinese New Year which can stop all communication and production for 90 days).

4. How often does your product change?

Making updates to design or packaging can be a lengthy and costly process. Getting first articles or prototypes can take several months.

5. Can you dedicate resources to handling logistics, shipping, customs, taxes, and fees?

You have to get the product into the country safely, legally, and efficiently.

6. Consider your ethical convictions.

Some companies completely disregard this element, while others give it too much weight.  Every business decision must be made through the lens of your company values. Labor laws, wages, work environment, quality standards, politics, environmental factors, and other factors change from country to country.  Your control over those elements decreases greatly when production shifts to a different country. You have to decide how important that is to you, your company, your company’s image, and your customer.

Despite the common conception that price drives manufacturing overseas, there are a lot more variables involved. It all goes back to the traditional production triangle, The three corners represent fast, good, and cheap.  You can only ever have 2 of the 3.

Still unsure about where to manufacture your goods? Give us a call.  Let’s talk about your goals and capabilities.

 

 

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