The current stampede toward offshore outsourcing should come as no surprise. For months now, the business press has been touting claims from offshore vendors that work costing $100 an hour in the United States can be done for $20 an hour or less offshore. The transoceanic pipeline can be very long and filled with unexpected and expensive twists and turns. You could be creating a new competitor for your product. You may be giving your design and technology away. Before you enter into the unknown check out North American Die Casting Association – NADCA – and the many reasons to keep your die casting in the hands of the experts.
The best die casting products are made by the finest die casters in the world: the die casters of North America. We guarantee innovation, integrity, accessibility and reliability.
|Hidden Costs of Offshore Sourcing May Add 20% to Die Casting Expense|
|Unexpected costs often drive up the final price of die cast products by as much as 20 percent for manufacturers and OEMs that use offshore sourcing, according to a study conducted by the North American Die Casting Association (NADCA) in conjunction with the U.S. Department of Commerce.The results of the study are now available from NADCA as a booklet, “Hidden Costs of Offshore Sourcing.” The report lists the top seven ways offshore sourcing of die casting can result in higher than expected costs and offers examples to illustrate some of the issues companies face when they do not work with North American die casters.
Among the reasons for these unexpected costs are miscommunication, long lead times, the price of die failure, legal liabilities and payment for products sight unseen. The study also notes that market share and technology may be put at risk because of unscrupulous offshore die casters passing along trade secrets, specifications and marketing information.
“Many unsuspecting North American manufacturers and OEMs have been lured by visions of low prices for offshore die casting. Unfortunately, many of them have learned there’s a bigger price to pay when their suppliers become competitors by copying designs or technological breakthroughs,” said NADCA President Daniel L. Twarog.
According to NADCA, many manufacturers are discovering that there are very good reasons for choosing North American die casters, including innovation, integrity, accessibility and reliability. “Choosing North American suppliers not only provides quality and value with your die casting, but it helps safeguard the investment made in designing a product,” explained Twarog.
Expect to spend an additional:
1 percent to 10 percent on vendor selection and initial travel costs.
2 percent to 3 percent on transition costs.
3 percent to 5 percent on layoffs and related costs.
3 percent to 27 percent on productivity lags.
1 percent to 10 percent on improving software development processes.
6 percent to 10 percent on managing your offshore contract.
For a copy of the NADCA booklet contact our sales department.