Does Global Sourcing make Sense for You?
The debate over whether it is healthy for American companies to shift manufacturing offshore is over. According to John McCarthy, Forrester Research Group Director, “This is going to be one of the biggest macroeconomic shifts in the overall U.S. economy in the next 10 years.” (1)
Gartner Research forecasts that some 80% of American corporations will have at least considered offshore manufacturing by the end of next year.(2)
The reason – aggressive companies know higher profit margins can only be realized through greater cost efficiencies and better utilization of time and money.
Outsourcing manufacturing is critical to maximizing productivity. The real question is, “How long will your company remain competitive if it fails to use this proven business concept?”
Global sourcing will have as positive an effect on American business supremacy as Henry Ford’s innovative concept of the assembly line. It generates the necessary funds for increased R & D. This enables companies to remain on the forefront of their industry in the increasingly competitive global economy. The concept of “creative destruction” or being willing to constantly adapt to maximize productivity is the genius of American entrepreneurship.
Many of today’s most sophisticated companies have chosen to almost exclusively concentrate on R&D and sales, outsourcing the vast majority of their high volume and/or labor intensive assembly operations - thereby eliminating problems of production, staffing and continuing plant modernization.
Others like Wal*Mart
are famous for outsourcing the manufacturing of entire product lines to cut prices, raise market share, and dominate their industry.
Finally, many firms choose to produce their higher margin, patented and/or more sensitive components in house and outsource their less critical or non-technologically sensitive items.
The following are questions all companies must ask themselves on a continuing basis:
• Would cutting production costs 30-60% breathe new life into a marginal product line?
• Is lack of plant space preventing an expansion into new markets?
• Is customer demand outstripping production capability?
• Are increased costs of component parts threatening a major product line?
• Is it becoming more difficult to staff second or third shift operations?
• Is production problem solving taking up too much of managements time?
Let us show you how offshore manufacturing via Oracle Manufacturings state-of-the-art processes can dramatically reduce your production costs and overhead. Start now by contacting the Industries Leading Customer Centric Global Manufacturer.
1 Barron’s Online, June 26
2 Gartner Research Group, Outsourcing across vertical markets