Cure for offshoring: The design side of product development, from Machine Design

A recent article written by Leslie Gordon of Machine Design.

You have probably seen it yourself: images of Chinese workers toiling in mud-floored factories, each feeding a separate punch press, as if part and parcel of a living, progressive die. The lure of this cheap labor has sent many U.S. manufacturers scrambling overseas to cut production costs.

Although design-for-manufacturing tools that would have made this exodus unnecessary have been around for more than 20 years, companies continue to overlook them, says Mike Shipulski, chief engineer of plasma-cutter manufacturer Hypertherm,, Hanover, N.H. “Companies are sticking their heads in the sand. Many U.S. firms have become too entrenched in doing things the same way. For example, a typical product-cost breakdown shows material to be the largest cost at about 72%. Overhead is around 24% and labor is only about 4%. The question becomes, why continue to move manufacturing to so-called ‘low-cost countries’ to chase 50% labor reductions for a whopping 2% cost reduction? And it’s sillier than that because companies don’t account for cost increases in shipping and quality control.”

The problem is that companies neglect to efficiently account for cost during the design side of product development….

Click for the rest of the article

One Response to “Cure for offshoring: The design side of product development, from Machine Design”

    With the cost of labor representing only about 5% of the total cost of a finished assembly, the only thing that makes sense with off-shoring is when you build it next door to who uses what you sell. Without my facts and data in front of me at the moment, I’ll bet my next paycheck that the cost of logistics far exceeds the cost of LCR labor. So what’s YOUR justification? Better make it a good one, otherwise you are contributing to the elimination of the tools we use to keep our economy alive with sustainable manufacturing. Rather than eliminating that, why not work on eliminating the waste that is designed INTO the product that causes you to look at off-shoring in the first place? You’ll enjoy life a whole lot more. I promise.

Leave a Reply

Mike Shipulski Mike Shipulski
Subscribe via Email

Enter your email address:

Delivered by FeedBurner