In response to speculation about his death in 1897, Mark Twain wrote, “the reports of my death are greatly exaggerated.” The same can be said about offshoring. Despite some negative press, offshore manufacturing is alive and well and supporting U.S. companies in a variety of ways. In fact, according to Deloitte, businesses spent more than $700 billion globally on outsourcing in 2022.
Here are the primary reasons why U.S. companies choose to outsource manufacturing:
Cost Savings. Outsourcing dramatically cuts manufacturing costs by providing access to more affordable labor, less expensive real estate, reduced overhead, lower freight costs and efficiency gains.
Access to Skilled Labor. Outsourcing provides access to skilled labor that may not be readily available in the U.S. According to Kearny, U.S. manufacturers will encounter a substantial skill gap in the next five years as nearly 2.4 million manufacturing jobs are expected to be left unfilled due to baby boomer retirement and a shortage of millennials interested in manufacturing careers.
Specialized Suppliers. The sheer volume of manufacturing facilities and workers across Asia provide highly specialized suppliers that typically deliver a better rate than is found in the U.S. These ideal suppliers have the right equipment, experience, workforce and quality systems to produce high-quality products at lower costs.
Ability to Meet Capacity. Outsourcing helps companies meet demand by having access to a larger pool of skilled workers, which can improve service quality and meet business needs. It also provides the ability to scale up quickly when high-volume manufacturing is needed.
Transfer of Risk. Outsourcing manufacturing also enables companies to transfer capital risk during the most critical phase of business: scaling up. Risks that can be avoided include the purchase of sophisticated and expensive equipment, labor costs (including workers compensation) and overhead costs.
Proximity to Raw Materials. Accessing raw materials closer to the source provides tremendous savings by helping reduce or eliminate freight costs. For example, in the case of a raw material like rubber, outsourcing these components to where rubber trees grow (Southeast Asia) makes better logistical sense.
Lower Finished-Product Costs. With lower material and labor expenses, products manufactured offshore are able to deliver a reduced finished-product cost, enabling companies to offer more competitive pricing to their customers and/or help increase profitability.
Access to New, International Markets. Moving manufacturing offshore provides access to new opportunities, including insight into the latest and most efficient manufacturing techniques and product
exposure at an international level. Because commerce is increasingly global, the
ability to compete on an international platform is a must.
Ability to Focus on Core Business Initiatives. Outsourcing can also free up companies to focus on core initiatives rather than spending resources on managing manufacturing concerns. Alloy Products Distribution (APD) delivers a one-stop-shop of outsourced manufacturing services that include on-site design, engineering, prototyping and logistics.
Summary: Outsourced Manufacturing Is a Win!
Overall, outsourcing reduces costs and helps U.S. companies be more competitive and profitable. The key is to choose a professional partner that will help ensure your outsourcing success.
Why Choose APD’s OEM Services?
- Proven leader with more than 250 OEM clients
- In business since 1986, offering decades of experience
- U.S.-based in San Clemente, California
- Extensive vertical industry expertise
- ISO 9001 quality certified
Our Promise to You: A Partner You Can Trust
At APD, we are more than a manufacturing and distribution company; we are your reliable partner committed to your success.
- Trusted Partnership for reliable deliverables.
- Streamlined Processes for operational efficiency.
- Efficiency, Quality and Value for top-notch products.
- Quality Assurance with regulatory compliance, including ISO 9001.
- Proven Track Record for your peace of mind.
- Industry Leadership with nearly four decades of experience.
Contact APD to discuss the right process for your next project and take advantage of our turnkey services, including on-site design, engineering, prototyping and logistics.
Request a quote today: https://castingforgingmolding.com/request-a-quote/