June, 2013 Continued from previous page
duction facilities overseas versus in the U.S.. With more than 45 years of manufacturing experience, Moser is on the board of the National Institute for Metalworking Skills (NIMS) and is President of the Swiss Machine Tool Society (SMTS). He participated in President Barack Obama’s 2012 Insourcing Forum and has been fea- tured in leading business publica- tions, such as The Wall Street Jour- nal and Business week. He has con- sistently warned of hidden costs con- nected with offshore manufacturing: “These companies most commonly overlook emergency airfreight, trav- el, and the negative impact on inno- vation of separating manufacturing from engineering. These could ac- count for 20 to 30 percent of the total cost of offshoring.”
Free Calculator The Reshoring Initiative web-
site offers a useful calculator, the To- tal Cost of Ownership (TCO) Estima- tor™ for original equipment manu- facturers (OEMs) and other users. TCO can be defined as the full cost to design, build, store, package, ship, sell, and maintain a product. TCO al- so assumes end-of-life material pur- chases and expenses associated with discontinued materials (such as obso-
The rising costs, instability, lack of security, and various
other reasons are causing many companies to reconsider the costs of maintaining production offshore.
lete components). The online TCO Estimator works with a user’s inputs and requirements to help them com- pute their costs of production at dif- ferent locations. It provides an on- line analysis with plots and graphs to show which production location makes the most sense. The TCO Es- timator even provides formulas to show how cost comparisons are made for different locations versus U.S. dollars, and allows users to modify inputs and factors in the formulas if a user feels the conversion factors need adjustments. For any costs or charges not accounted for, the tool provides fields to add standard and additional charges as needed. The TCO Estimator is an effec-
tive computer program for perform- ing production cost analyses, but it cannot predict potential issues with overseas suppliers. Some of these is- sues include quality problems when first starting up a production facility, the time and effort to train person- nel, logistics of preparing paperwork (such as commercial invoices, pack- ing lists, detail sheets, and bill of lad- ing) for shipments from an overseas facility, finding a reliable Customs Agent for a reasonable cost, securing legal aid and legal contracts with overseas suppliers, and obtaining an import license if needed. Choosing a production location
is not a trivial decision, but it can have significant long-term impact on the financial health of a business. Reshoring has proven to be a viable option for many companies, and the TCO Estimator is a useful tool that can make that decision somewhat easier by reducing the chances of
www.us-tech.com A Contract Manufacturing Guide To Reshoring
overlooking hidden costs associated with offshore manufacturing. A number of well-known compa-
nies have discovered the benefits of reshoring in recent years. The most common switch has been from China back to the U.S. For example, Gener- al Electric has transferred production of water heaters from China to Louisville, KY, and Whirlpool brought manufacturing of appliances from China to Greenville, OH, while Mas- ter Lock moved production of combi- nation locks from China to Milwau- kee, WI. Musical equipment manufac- turer Pigtronix switched production of guitar pedals from China to Port Jef- ferson, NY while Seesmart shifted production of light-emitting-diode
(LED) lights from China to Simi Val- ley, CA. In addition to moving produc- tion from China, some companies, such as automotive manufacturer Ford, brought production of different automotive parts from India, Japan, and Mexico back to the U.S. For companies currently operat-
ing with offshore manufacturing fa- cilities and interested in reshoring, working with a custom contract man- ufacturer such as BTW, Inc. can help speed and simplify the decision-mak- ing process of whether to stay off- shore or to reshore. This custom con- tract manufacturer offers a wide range of manufacturing services, in- cluding PCB assembly, clean-room manufacturing, product life-cycle
support, global supply-chain man- agement, mechanical assembly and integration, and testing and test de- velopment. BTW has worked with clients from concept through final production to help them decide on the best sourcing solution for their products. The company has been in- volved in numerous formal presenta- tions on reshoring, and has provided direct customer training on the use of the TCO Estimator tool and how it can be applied to an OEM’s specific products and projects. Contact: BTW, Inc., 11551 Eagle
St. NW, Suite 3, Coon Rapids, MN 55448 % 763-767-4625, fax: 763-767- 4635 E-mail:
sales@btw-inc.com Web:
www.btw-inc.com r
Page 21
See at Atlantic Design and Mfg. Booth 3932
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92