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Improved Product Design
Practices Would Make
U.S. Manufacturing More
Cost Effective
A Case to Consider Before Outsourcing to China

 
Abstract

In the global marketplace today, more and more companies are looking to China for both assembly and manufacturing.

Drawn in by the lure of extremely low labor rates, U.S. companies are eager to rapidly move manufacturing and assembly offshore. These companies seem very interested in reducing manufacturing costs, but many of them rarely take the time to understand the significant potential for cost savings during the design phase of their products.

Why is this so? Product development methodologies such as Design for Manufacture and Assembly have shown repeatedly over the years that most of the cost of a product is fixed during design. The best time to find cost reductions, then, is during the design stage, not during manufacturing.

The question has now become: Is sending a product design overseas for manufacture really the cost-effective solution, or would U.S. companies benefit from taking the time to redesign products and keep manufacturing here?

In this paper, we examine some of the hidden costs of outsourcing that U.S. manufacturers may not be taking into account. To illustrate our claim that product redesign could be a cost-effective alternative to outsourcing, we offer two case studies that quantify costs associated with manufacturing and assembling products in China.

Downloads

Description Link to file File size
PDF file of study: "Outsourcing to China - A Case Study Revisited Seven Years Later" revisited.pdf 675KB
PDF file of study: “Improved Product Design Practices Would Make U.S. Manufacturing More Cost Effective: A Case to Consider Before Outsourcing to China” paper.pdf 292KB
PDF file of 09-07-04 news release: “Study Shows Product Redesign, Not Outsourcing to China, Holds Cost Advantage for U.S. Manufacturers” nr2004.pdf 37KB
Background Information    
PDF file of background news from March 9, 2000: “Manufacturers Say They Cut Product Costs by Half Using Design for Manufacture and Assembly” nrbkgd.pdf 48KB
Desktop Engineering article titled “Need to Cut Costs? Check Your Design First. An open letter to U.S. manufacturers.” Click here  

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