Written by: Erik
9/28/2008 12:38 PM

From www.productdesignresources.com :

Chances are you own something that has been manufactured in Asia. Chances are that you own a lot of things that have been manufactured in Asia. In fact, Asian manufacturers are responsible for many of the products that reach western markets. Because of companies like Walmart, and the culture of cost, companies have heavily outsourced manufacturing to Asia for two decades. There are many consequences of this now commonplace practice. One consequence is that in some markets, it appears there is no way to compete unless you manufacture your product in Asia. Another consequence is that the quality of a number of products has suffered, because of lower quality materials, less government regulation, and product details lost in translation. Recent events, highlighted by the mainstream media, of unacceptable levels of lead in some toys from China show what can happen if you don't have control over how your product design is executed.

The first thing you must do is make sure that Asian manufacturing is a good option for your company and your product design. Everybody knows the reason to manufacture in Asia is because it can be cheaper. The key is that it can be cheaper - it is not always the case that it is. Before you decide that you must manufacture in Asia, do a complete cost analysis. Consider the following when doing your cost analysis:

- Is your product mass-produced or is it highly configurable?

- Are you looking for just components or complete finished goods?

- Consider freight costs now and in the future

- How much will it cost to actively manage the manufacturing development cycle from half-way around the world?

- Do you have to hire an interpreter?

- What are the costs of materials here vs. there? Typically, there is no material cost advantage in Asia.

- What are the labor costs here vs. there? Typically, there is a substantial labor savings, however, in some areas because of social issues, labor costs are becoming less advantageous.

- Is there a product perception cost by doing manufacturing in Asia? Is your market willing to accept a product without the "Made in USA" label? Is your market dominated by "Made somewhere in Asia" labels, enough that a "Made in USA" label would be a competitive advantage?

- How expensive are trips to Asia (There is no way to avoid face to face visits with Asian manufacturers, you or somebody else within your organization will have to go there frequently to monitor progress, perform audits and quality inspections, and to maintain the business relationship)

Complete article... at www.productdesignresources.com

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