How Using Foreign Manufacturing Can Leave Your Company High and Dry

While foreign manufacturing offers the prospect of inexpensive parts and labor, the incidental costs that occur can make outsourcing to foreign manufacturers cost prohibitive over the life of the product run. In addition to having an adverse effect on costs, these same incidental circumstances can negatively impact consumer perception of your company at large. All of this is primarily due to the extended supply chain and potential disruptions that can occur with such a lengthy supply chain. No matter their size all businesses and companies, large or small, will eventually be affected by these situations.

Transport Disruptions:

The most common incident that occurs that has the most immediate and visible negative impact is transport disruptions. While labor issues such as strikes and work slowdowns are the most common, there are others that have a similar delaying effect. Weather, is just such a concern. Less of a concern than in the past, it is increasingly becoming a factor in having to route shipments in manners that can result in delays. Any delay in receiving critical parts or merchandise can produce a profound negative effect to both the bottom line and customer perception of your company.

Safety and Security Concerns:

Safety and security concerns can present problems that can and will delay shipments. Both piracy and terrorism is on the rise and while there many not be an specific incident that causes immediate concern, security authorities are well known for delaying shipping in order to secure or search docks, warehouses and more on the possibility of an incident and thus your shipment is delayed for long periods. Additionally, depending on the location of the manufacturer, there can be political incidents that can disrupt orderly transport.

Over the past several decades, outsourcing to foreign manufacturers for parts and other goods was common. However, there has been a recent trend towards bringing more manufacturing back to domestic manufacturers due to problems with shipments being delayed by the reasons above or being withheld for other reasons. Foreign manufacturing does have its benefits, but it can result in problems that are difficult to overcome, especially, where consumer perception is involved. Therefore, for many companies domestic manufacturing is the better, and safer route to follow.