pitfalls of overseas manufacturing
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Pitfalls of Overseas Manufacturing. Larry Butz GEA Consulting LaCrescent, MN. Agenda. Why Manufacture Overseas Types of Manufacturers Finding a Manufacturer What to Expect Evaluate the Differences Risks “Insourcing” Advantages. Larry Butz. President and Founder GEA Consulting - PowerPoint PPT PresentationTRANSCRIPT
Larry ButzLarry Butz
GEA ConsultingGEA Consulting
LaCrescent, MNLaCrescent, MN
Agenda Why Manufacture Overseas Types of Manufacturers Finding a Manufacturer What to Expect Evaluate the Differences Risks “Insourcing” Advantages
Larry ButzLarry Butz
President and Founder GEA ConsultingPresident and Founder GEA Consulting
20 years with Trane specializing in20 years with Trane specializing in– Product DevelopmentProduct Development– Technology & Product GlobalizationTechnology & Product Globalization– Technology Transfer & Factory Start-upTechnology Transfer & Factory Start-up– Environmental SciencesEnvironmental Sciences
Five Years as Engineering Manager in Five Years as Engineering Manager in FranceFrance
Why Manufacture Overseas?
Lower Cost Product
Access to Overseas Markets
What to Expect Lower labor costs Lower raw material prices Lower component/sub-
assemblies costs Range of quality levels
available Fewer constraints
(regulations) on factories
Where to Manufacture?Forbes Top Ten for Outsourcing
India China Malaysia Czech Republic Singapore
Philippines Brazil Canada Poland Chile
Types of Manufacturers State Companies Wholly Owned Locally Joint Ventures Wholly owned Foreign Your Own – Build or Buy
How to Find Government Agencies Industry Directories Web Bidding Networking Shows & Exhibitions
Be Prepared for Change Longer Pipeline Reduced Flexibility Change Control Cultural Differences
Societal Value Systems Language
Business Customs National Laws
Be Prepared For Change More Administrative Personnel
Logistics - Import/Export Banking/LC/Currency International Law
Communication Time Difference Language
Product ModificationsThe relative cost of equipment vs.
labor is significantly different. Expensive labor saving equipment used in the US may not be the best choice overseas.
Be prepared to make minor changes in your design specifications to obtain best results.
Evaluate the Differences
Location Legal/Patent Language Cultural Resources Political System Logistics
Taxes Laws Safety Standards Currency Infrastructure Environmental Business Customs
Risks Currency Variations Proprietary Design Info Political Stability Hidden Costs
Hidden Costs Packaging Communications Import/Export Taxes Waste/Shipping Damage Legal Product Redesign Administrative Personnel
Do Your Customers Care……??? Where your product is made? What the working conditions are? Environmental impact?
Does
“Made in America”
have value to your customers? Today? Tomorrow?
Advantages of “Insourcing”
Quicker Response Times Flexibility (“Specials”) Customer Visits to Factory Proximity – Designers & Manufacturing
Opportunities to Grow Customer Intimacy Emerging Customer Needs New Products Service your Product Partnerships
Thank You for Your Time Thank You for Your Time
Larry ButzLarry ButzGEA Consulting, IncGEA Consulting, Inc
2420 N. Pine Creek Rd. 2420 N. Pine Creek Rd.
LaCrescent, MN 55947LaCrescent, MN 55947
Tel: 1-507-895-6826Tel: 1-507-895-6826
Fax: 1-507-895-4001Fax: 1-507-895-4001
Email: [email protected]: [email protected]
www.gea-consulting.comwww.gea-consulting.com