Outsourcing is neither a trend nor a fad, as of 2019.
For companies in labor-expensive countries such as the United States, it’s a mandatory requirement to stay competitive.
Every business is different and the reasons for outsourcing processes (including machine-intensive processes, industrial processes, and others) could be different. Some of the common reasons to outsource your operations include lowering labor and operational costs (and hence increased profits).
Given that 12.4 million Americans still work in the manufacturing sector, upcoming trade wars, and the increasing use of automation are all making the future of manufacturing jobs in the U.S a little too uncertain.
According to Reshoring Now [http://www.reshorenow.org/], a nonprofit based out of Illinois, The United States added a 30,000 odd manufacturing jobs as a result of “reshoring” — the opposite of “outsourcing” where the focus is on creating jobs (that could have been outsourced) within United States.
Harry Moser, president of Reshoring Now, claims that more than 300-400 companies have announced moving their respective operations back to the United States (for various reasons).
None of that is to say that we are finally solving the “actual” problems that businesses that depend on solid manufacturing face, here in the U.S.
We still have challenges, and we need solutions fast.
Here are some of the outsourcing challenges manufacturing companies face with regards to manufacturing processes in the United States & how we can help:
Outsourcing to “China” isn’t cheap anymore
One of the major reasons for reshoring is the total opposite of what we saw in the last decade or so of rampant outsourcing. Labor costs in manufacturing hubs like China have been steadily increasing.
Outsourcing to China — for instance — isn’t as inexpensive as it once was. According to Sophia Yan of CNBC [https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html], the average wage for a Chinese worker now stands at $3.60 per hour which is a 64% increase compared to the average hourly wages in 2011. These wages are 5 times more than the average wage in India (for manufacturing) and on par with countries such as Portugal and South Africa.
Contrary to popular belief, outsourcing isn’t as cheap as you’d have thought it would be. So, how do you keep your expenses relatively low? What can you do to retain your competitive edge and stay profitable? Will you need a payroll outsourcing company?
At Ismerie [https://ismerie.com/machining/], we have grown to cater to a wide string of industries and applications while keeping costs low for our clients.
Our continued investments in machinery, skilled labor, process controls, quality control initiatives help us deliver projects for customers on-time and on-spec.
One distinct advantage that offshore vendors who specialized in manufacturing is that they could offer a mind-boggling array of processes and had access to machinery, plants, processes, and labor to provide complete products, from soups-to-nuts.
For most small and medium sized businesses in the U.S, it’s almost cost-prohibitive to setup complete machinery, processes, and hire labor to get similar products developed within United States.
But with rising costs and increasing difficulty outsource — Trump’s tariffs, trade wars, and international trade barriers notwithstanding — even this positive benefit of outsourcing is dying a slow death.
Ismerie [https://ismerie.com/ ] can help solve this problem what with a wide array of process-centric services available such as machination, fabrication, assembly, testing, and finishing.
When you outsource, it’s not always a bed of roses.
According to a study conducted by John Gray and two other researchers from the Ohio State University Fisher College of Business [https://www.inc.com/leigh-buchanan/how-american-manufacturers-are-reshoring.html ], small to midsize companies claimed a few of the most common reasons why they had to contemplate moving manufacturing back to the United States and other issues with outsourcing:
- Unapproved use of equipment and other vendors for their manufacturing processes
- Produced finished products that differed drastically from the quality of samples first shown to clients
- Rampant Intellectual property theft, and
- Lack of communication and responsiveness to problems.
Our continued investment of over $10 million in high-quality machinery ensures that our equipment inventory [https://ismerie.com/equipment/] boasts of capability, reliability, and productivity that a few companies can match.
Our equipment redundancy ensure zero delays. Meanwhile, our unique RPM (Repair, Prevention, and Modification) program tracks and prioritizes machine activity to allow for maximum reliability.
We are all-American to ensure spot-on communication along with instant responses to clients.
With a new era in manufacturing processes and a passion to serve, we are looking to change the way American small, medium and even large enterprises produce goods. If you need help to find a premium partner for machination, fabrication, assembly, testing, and finishing goods, reach out to us now [https://ismerie.com/contact/].