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Is outsourcing good for your company?

The debate over whether it is healthy for American companies to shift manufacturing offshore is over. According to John McCarthy, Forrester Research's Group Director of Research, "This is going to be one of the biggest macroeconomic shifts in the overall U.S. economy in the next 10 years."

Gartner Research forecasts that 80% - 90% of American corporations will have at least considered offshore manufacturing by the end of year 2008. 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 to China 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 20-40% breathe new life into that marginal product line?
  • Is lack of plant space preventing an expansion into a new product line?
  • Is customer demand outstripping production capability?
  • Are increased costs of component parts threatening a major product line?
  • Is it becoming more difficult to staff that second or third shift?
  • Is production problem solving taking up too much management time?
Let us show you what outsourcing your manufacturing can do to your bottom line. Find out more by contact us directly. Let us show you how offshore manufacturing in China can dramatically reduce your production costs.

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