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How Offshoring Impacts Consumer New Product Development

Posted by Al Timm on Jun 10, 2020 9:31:10 AM
Al Timm

Offshoring Consumer NPDCentral to a new product development program (NPD) is the budget, and exploring economic efficiencies often leads to a debate between offshoring and reshoring.

In most instances, overseas costs are particularly attractive compared to domestic production of custom injection-molded components for consumer applications.

However, in light of the coronavirus (COVID-19), the world is functioning within a new normal. Bottom line decisions are no longer black-and-white as the pandemic complicates — and often upends — supply chains, adding project time and cost. Quickly, the offshore injection molding "bargain" becomes a candidate for reshoring. 

Focusing on cost alone can be detrimental to your NPD and diminish the value of reshoring.

Overseas injection molding brings with it some considerations that make offshoring not quite the deal it appears to be:

Communication

Aside from the obvious communication challenges that language and cultural differences present, there are added obstacles to business efficiencies, including:

  • Time zone disparity
  • Added shipping time
  • Variance in standard units of measure that could cause inconsistent directives and scheduling delays
  • Faulty tolerance calculations and costly rework

Location

Offshoring effectively removes your team from the manufacturing process until your injection-molded components are produced — and that’s too late. Add to it some of the pandemic-imposed travel restrictions that prohibit facility visits abroad, and your NPD team is all but cut off from the injection molding process. Closer proximity to your molder allows for seamless face-to-face or real-time involvement and input. 

Quality

Experienced domestic custom injection molders can easily implement, manage, and execute your NPD, largely due to experience and capabilities surrounding production of complex components for consumer applications. Offshoring could well be limited to plastic parts that are easiest to machine.

Cutting design corners impacts tool usability, durability, and maintenance. It could also compromise injection-molded component quality during manufacture and throughout the lifetime of the product in which the part is used.

Transit

Distance generally increases shipping costs, especially when several modes of transportation are required. Unlike most domestic transportation, offshoring introduces additional expenses like:

  • Shipping containers
  • Duty and import taxes
  • Customs and other inspection fees

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 shipments from domestic injection molders can arrive at their destinations in about 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 plagiarize designs to mass produce items for international distribution — a concern and potential hazard for OEMs.

On its face, offshore injection molding is beneficial for the industrial NPD bottom line. Tallying up the hidden expenses and potential risks, however, tells another story. Reshoring projects with the help of expert custom injection molders like Kaysun alleviates these concerns and provides true value to the NPD program and your consumer applications.

For more on the advantages — and disadvantages — of offshoring, download our white paper, Exploring Reshoring: Insights for Manufacturers. Click the button below to access your copy now.

Exploring Reshoring: Insights for Manufacturers

Topics: Supply Chain, Consumer

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