Fourstar Can Be Part of Your Cable or Harness Assembly and Box Build Reshoring and Nearshoring Toolkit
Have you been considering bringing your custom cable assembly or wire harnessing production closer to home because low-cost regions did not work out the way you had planned, or costs went up faster than anticipated? Have you found the “total costs” of products are too high? Perhaps you are re-thinking customer intimacy, proximity, and time to market? Or, lastly and most concerning, perhaps your off-shore quality did not meet your customer’s, or your, expectations.
The decision to move operations close to home involves weighing direct and indirect factors, such as:
- Labor costs
- Material costs
- Customer proximity
- Product quality
- Changing exchange rates
- Expat costs
- Rising labor costs
- Environmental concerns
Reshoring Is Closer than You Think!
Before you reshore or nearshore, consider this: that low-cost region may be in your own backyard. This process of reshoring is rarely easy, and sometimes you need a good toolkit to make the effort successful. If you were a professional athlete, you would have personal trainer and other support services to prepare you to be your optimal best for each event. A reshoring team is like the professional trainer, and can help prepare you for what is ahead, as well as bridge what looks straightforward on paper, to what is actually being done with respect to product manufacturing, quality, and engineering.
Defining Reshoring and Nearshoring
Let’s back this up a bit and be clear about how reshoring and nearshoring is defined. Simply put, they involve either bringing a company’s offshore operations back to the country of origin, or to a country in very close proximity to the country of origin—often with a country that shares a border.
What Are the “Total Costs” of Offshore Production?
To gauge the real costs of offshoring, and conversely, the benefits of reshoring; we need to look at the total cost of supporting an offshore operation. Many of these subtle and hidden costs go unnoticed during the push to get reduced labor when initially set up. As many companies have found out, the longer term hidden costs combined with the increased labor rates in low-cost regions have outgrown the benefits in many situations, especially if your target market is not in one of these overseas areas.
Below is a general list of total cost areas.
- Material costs
- Labor costs
- Transportation costs
- Increased inventory due to transportation time (4-6 weeks by boat from Asia)
- Quality costs
- Communication costs
- Intellectual property concerns
- Travel and expatriate costs
- Union fees/work stoppages
- Foreign legal, financial, and environmental compliance
- Cost of compliance to unwritten local and federal laws
- Negative name recognition and value proposition impact
- Plant maintenance costs
“Lower Total Cost” Locations May Be in Your Own Backyard
It is interesting to note that when the same effort and resources are put into domestic productivity as when expended on overseas operations, suddenly the onshore calculation of the total cost proposition may look like a better option: labor approaching parity, operating in the same time zones, transportation costs, and all the other areas described above.
Okay, So Where Do You Start?
As noted, this is a process that requires serious evaluation. At Fourstar, we are uniquely prepared to partner with companies that are reshoring and nearshoring. A number of our employees have lived, worked, and traveled in Asia Pacific, Mexico, and other areas. The language portfolio at Fourstar includes English, Spanish, Portuguese, Vietnamese, Cambodian, and Mandarin. We have a very good understanding the systems, cultures, and languages commonly associated with manufacturing protocols around the globe. Fourstar has a proven track record in helping customers with reshoring and nearshoring operations, as well as NPI.
Fourstar partners with leading companies to “find a better way” for time to market, new product introduction, and design for manufacturing (DFM), and reshoring and nearshoring initiatives. If you are considering reshoring, we’d love to get the conversation started. Using our reshoring expertise, we’ve compiled an informative eBook, “Reshoring Manufacturing for Custom Cable Assemblies and Box Builds” that walks you through all the variables you need to evaluate when considering reshoring manufacturing. Download the eBook now.