When companies consider outsourcing manufacturing of their product, one of the most challenging questions they face is where and how to have their product manufactured. Answering this question correctly can be vital to the success of both the product and the company.
Being a manufacturer of custom fabricated rubber products, we speak to customers every day that face this dilemma. We know how tempting foreign manufacturing can be. Every company would ultimately love to expand their margins without increasing the price of their product. Foreign manufacturing can sometimes give companies an opportunity to do that. Most companies that choose foreign manufacturing, do so for one reason: Price.
It’s important to understand why foreign manufacturing can sometimes be cheaper than American manufacturing. The United States has some of the highest labor standards in the world. These standards ensure a safe work environment, fair pay, and ultimately a healthier business structure. While not all foreign manufacturing companies take advantage of the low labor standards their country may set, it’s important to not put blinders on to the ones that do. One of the reasons the ‘Made in America’ label has value, is because we as Americans take pride in adhering to ethical business standards.
Price isn’t the only factor when deciding where and how to have your product manufactured. Other factors that companies should consider are Quality, Reliability, and Service provided by the manufacturer. These factors make American manufacturing far more appealing.
The reputation and success of a company is heavily influenced by the quality of their product. Quality is a massive deciding factor when a consumer is considering a purchase between two brands, so it should be equally important to those brands, as they are selecting the manufacturer for their product. When the automotive airbag manufacturer, Takata Corp, produced faulty airbags that were placed in over 3.4 million vehicles, it didn’t just damage the reputation of Takata. It also damaged the reputation of automakers using that product. When a company chooses a manufacturer to make their product, they are trusting that company with their reputation.
In a world where international trade relationships are constantly changing, choosing foreign manufacturing can be risky. While a lower price may entice a company into foreign manufacturing, a tariff or other uncontrollable circumstance can force increased prices and leave a company scrambling to find a new supplier. Having the stability of an American supplier can save your company time, and headaches.
In business, things change regularly. When a customer gets in a pinch and needs parts ahead of schedule, or a change needs to be made to a current purchase order, a company needs to have the ability to be versatile with its manufacturing. A manufacturer of your product is an extension of your company. This is a huge benefit to American manufacturing and the reason a lot of companies only consider American manufacturing.
Not all foreign manufacturers are bad, and not every American manufacturer is good. Some foreign manufacturing is necessary. Each situation is different and should be approached with all the necessary information. As an American manufacturer, we know how important manufacturing is to this country, and we hope that companies facing this dilemma of where to have their product manufactured, would consider the benefits of choosing American.