Low Cost Region Options
BTU - Vickie Pesiridis, Clean Tech Testimonial

Have a Question?

Product Manufacturing Low Cost Region Options

 So we’ve all heard about the tremendous savings that come with shifting your production outside of the U.S., to a product manufacturing facility in another country. Can it work? Does it work? To answer these questions, one must look at all of the associated costs that go hand-in-hand with the realized savings.

Risk vs. Reward. The rewards are quite obvious: reduce product costs by utilizing lower-cost labor and a highly-integrated supply chain. This can be an effective strategy if your product fits a certain profile. Typically, higher volumes, mature products and stable demand allow you to take full advantage of a low-cost region arrangement.

Now for the Risks. Many would argue that a number of companies in foreign countries have modified their business models to accept lower volumes, immature/early products and erratic demand. Why and at what cost? Most of the flexibility has come from changes in the economy and new market dynamics. Products that cost more to manufacture (lower volumes, immature/early products and erratic demand) become unappealing to low-cost regions as markets/economies improve and high-volume demand returns. As labor costs rise with the standard of living around the globe, the labor-savings gap with U.S. manufacturers diminishes. Even more risky are frequent work stoppages, political instability, high employee turnover, human rights violations and IP protection issues. Add in excessive travel costs, higher shipping costs, import fees/duties and costs associated with trying to implement engineering changes remotely and you’ve got plenty of reasons to second-guess your strategy.

Cirtronics can offer a global supply chain, the latest product manufacturing technology, a stable workforce (Employee Owners), NPI and ECO expertise and highly competitive labor costs, all in your backyard. We're a financially sound, Woman Owned Small Business certified company that can offer you stability, consistency and peace-of-mind.
Product Realization - Product IntegrationProduct Realization - Complex Manufacturing