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
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.
|PDF file of study: "Outsourcing to
China - A Case Study Revisited Seven Years Later"
|PDF file of study: “Improved Product Design Practices Would
Make U.S. Manufacturing More Cost Effective: A Case to Consider Before Outsourcing to China”
|PDF file of 09-07-04 news release: “Study Shows Product
Redesign, Not Outsourcing to China, Holds Cost Advantage for U.S. Manufacturers”
|PDF file of background news from March 9, 2000: “Manufacturers Say They Cut
Product Costs by Half Using Design for Manufacture and Assembly”
|Desktop Engineering article titled “Need to Cut Costs?
Check Your Design First. An open letter to U.S. manufacturers.”