By: Jay Milender, Director of Sales
Asian labor rates are increasing, shifting the production equation to where smart manufacturers must recalculate the costs of offshoring their operations. While China may regain some efficiency due to advances in automation and production, some firms are choosing to hedge their bets by looking elsewhere to set up new manufacturing operations.
Before many companies consider moving operations to another foreign country, we suggest they compare the quality and competitiveness they can receive from US companies, like Lampin.
An article in The Economist found that when you tally the cost of production, including shipping, customs and duties, California was only 10% more expensive than the same product manufactured in China. Plus, the formula didn’t account for indirect costs such as travel.
Emerging sources for low-cost manufacturing are popping up, due to lower labor rates in other countries than currently offered in China. There are reports of large manufacturers moving to Vietnam and Sri Lanka, but find they often sacrifice a strong supply chain, efficient productivity or availability of skilled labor. Manufacturing in these countries still retain the well-known detriments of offshoring – long shipping schedules, expensive change orders and time and language barriers.
Firms who continue contracting with Chinese manufacturers are also facing new obstacles. Skilled labor in China is in high demand while the pools of less skilled workers are diminishing. Higher wages and fewer workers can affect the ability of these firms to meet their obligations.
So what are the choices for OEM’s looking for a solid, reliable manufacturer who can be a partner when bringing a new product to market or meeting the demand for an existing product? A cost-effective answer may be right in your backyard: the precision manufacturing companies in the United States.
At Lampin, we hear from our customers that competency always trumps cost. They say that our skill, quality and ability to respond rapidly to changing product needs are reasons to contract with Lampin instead of sourcing components offshore.
We serve many clients innovating in their industries who value the intellectual property laws in the United States. We also work with our clients to meet difficult turnaround cycles – for one client we were able to get a redesigned component in their hands within 24 hours – an impossible feat when contracting in Asia.
Give us a call to discuss the how your global precision manufacturing and assembly solution can be sourced cost-effectively locally.
