How Offshoring Impacts Industrial/Consumer New Product Development

Posted by Matt Bishop on Aug 3, 2016 8:53:00 AM
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Central to new product development is the budget, and exploring economic efficiencies often leads to offshoring options. This is especially true when the new product development program (NPD) involves injection-molded plastic components for industrial/consumer applications, as overseas costs are particularly attractive compared to domestic production.

But, focusing on cost alone can be detrimental to your NPD, particularly if your product has critical-use applications. Manufacturing complex injection-molded plastic components overseas brings with it some considerations that make offshoring not quite the bargain it appears to be:

Communication

Aside from the obvious communication challenges that language and cultural differences present, there are added obstacles to business efficiencies. Time zone disparity, added shipping time and variance in standard units of measure could prevent clear, consistent directives, causing scheduling delays and faulty tolerance calculations, ultimately resulting in costly rework.

Location

Outsourcing effectively removes your team from the manufacturing process until your injection-molded components are produced — and that’s too late. Closer proximity to your molder allows for seamless face-to-face or real-time involvement and input. Plus, it greatly reduces shipping costs and damage concerns since there’s no transoceanic transportation.

Quality

Experienced domestic molders can easily implement, manage and execute your NPD by creating the complex injection-molded components you need instead of those that are easiest to machine, as is sometimes the case with foreign production. Cutting design corners impacts the usability, durability and maintenance of the mold — putting the quality of the molded plastic component for your industrial/consumer application at serious risk at the time of manufacture or over the course of the product’s lifetime.

Transit

Distance generally increases shipping costs, especially when several modes of transportation are required. Offshoring introduces additional expenses like shipping containers, duty and import taxes, customs and other inspection fees otherwise absent on domestic transportation. Likewise, time becomes an issue. It can take up to 30 days for an overseas shipment, not including potential ports of entry delays. By comparison, most U.S. shipments take no more than one week.

Intellectual Property Protection

The United States has stringent intellectual property laws. Trademarked or registered products are safeguarded from counterfeiting, which preserves product and brand integrity. Some overseas markets disregard these legally binding protections and mass produce items using plagiarized designs for distribution in other countries, including the United States.

On its face, offshoring the manufacture of critical-use injection-molded plastic components is a boon for the industrial/consumer NPD bottom line. Tallying up the hidden expenses and potential risks, however, quickly tells another story. Partnering with a domestic, expert molder like Kaysun alleviates these concerns and provides true value to the NPD program and your industrial/consumer applications.

For more on the advantages — and disadvantages — of offshoring, download our two-part white paper, Reshoring: It’s Not a Myth. Click the buttons below to get your free copies.

Reshoring Whitepaper Part 1Reshoring Whitepaper Part 2

Topics: Industrial / Consumer, Supply Chain