I have noticed over the last 7 to 10 years a trend towards outsourcing to offshore factories.
Most of these endeavors result in disastrous results. The money we think we’re saving now is a dream. One critical aspect that is lost during this transition is control. I have seen first-hand a long list of issues that build up and eventually lead to the relationship between you and your offshore supplier to decay rapidly. Particularly in precision engineered components, materials, dimensions, heat-treating specs, manufacturing & processing procedures, storage, lot control, traceability and numerous other critical engineering & quality issues are always at risk when you release anything to an offshore supplier. Pricing lures are also prevalent, that great price for the first couple orders lull you into a warm fuzzy feeling of profit and success. Eventually you want to give more items to your offshore source. The prices eventually skyrocket for every minute change or item. Remember unless you are very careful your intellectual property will be revealed in a manner such that the offshore manufacturer has all your engineering drawings and will eventually figure out how to make your product themselves. I actually had a single component that was being mass manufactured in Taiwan almost get stolen
because someone saw the quantities and said to themselves, “if these guys need 1 million of these parts I am going to find out who their customer is and under cut them to steal the business” It end up the products life cycle was at its’ end and they could not grab hold.
Recently I found that one component that I used as an experiment for offshore outsourcing yielded a 10% price savings and still had a 10 week leadtime. It was a very simple part with no secondary operations. No customer of mine could wait that long, ever. I will touch on the positives and negatives of making in the USA and outsourcing in my next entry.