When you have a manufacturing business or own a business that has heavy manufacturing needs, the question of location is a universal concern. Afterall, your base of operations will have a significant knock-on effect on your manufacture lead times and opportunities for quality control. As in any business, it’s important to consider the cost and logistical effects. While all businesses want to avoid unnecessary costs, they’re equally wary of cutting corners and compromising on quality.
For decades, conventional wisdom has been that reshoring manufacture to Asian countries like China and India offers unparalleled value for money but in the current political climate Trump’s ‘America First‘ rhetoric and Brexit in the UK, many businesses are staying local or reshoring overseas production to their home provinces.
It’s all about the product
The decision of whether to offshore or keep your manufacturing operations closer to home will likely depend greatly on the nature of your business, the nature of your product and the volume you’re likely to need. Traditionally, manufacturers of the following products have benefitted from production in places like China, India and Turkey:
- Consumer electronics
- Electrical components
- Domestic Appliances
- Medical supplies
- Toys and games
- Leather goods
The manufacture of relatively simple products that require large volumes with little variation can be left to its own devices overseas, whereas products that are bespoke or specialized in nature or demand a shorter supply chain and lead times, domestic manufacture may be your best option.
Nobody does volume like China
Industry accounts for over 72% of China’s economy and as such it’s relatively easy to find a factory whenever you need one. China’s capacity to manufacture in extremely high volumes is unmatched anywhere in the world, making it a perfect choice for simple products or machined parts. Even if China isn’t the best fit for assembling your finished product, it may well be the best choice for parts and components. Moons‘ Industries, for example manufacture stepper motors and controllers that have a vast array of applications from 3D printing to lighting to medical science. There are numerous benefits to overseas manufacture but it does have inherent limitations.
The caveats of overseas manufacture
One of the chief concerns many have about overseas manufacture is quality control and it’s understandable to feel uneasy when the production of a product that we have a stake in takes place so far away from you. Quality and reliability will mean more or less to a manufacturer depending on the nature of the product. Simple children’s toys, for example, will be of less concern than more complex electronic items. More elaborate and delicate products may be more prone to production or transportation mishaps. Moreover, countries with a heavy manufacturing presence may have less rigorous enforcement in their manufacturing standards than their local counterparts. More complex electronic products may also be unsuited for production in China as some electronic parts are surprisingly difficult to source in China.
Ultimately there is no inherently ‘better’ choice between offshored or reshored manufacture. The decision must lie ultimately with the product and the priorities of the individual business.