Overseas manufacturing refers to relocating the production or assembly of goods to another country. Companies usually do this because labor costs in the other country are low. Overseas manufacturing may also occur because raw materials in the other country are lesser along with skilled labor. Overseas sourcing and manufacturing are not just for the big guys anymore. Every year more small and medium sized companies are utilizing overseas manufacturing or product sourcing. This can help business owners save two of the most valuable resources they have: money and time.
As the ability to consistently mass produce and meet demand is crucial to a company’s success, Overseas manufacturing is less expensive, allows for goods to be produced in very large volumes. Volume ensures that businesses and companies are able to meet their market needs every time.
For most small businesses, the trick to manufacturing overseas is to find a way to contract the job or go into a partnership with an overseas manufacturer without losing control of your product. Here are few important things business owners can do while opting for overseas manufacturing-
Ask for references: The first step is to ask each potential manufacturer if they have previous experience with similar foreign companies. Then ask if they would be willing to connect you with a few of their clients to share their experiences. If a manufacturer can’t or won’t provide any solid contacts or references, you may want to pass on working with them.
Ensure all parts of the product are feasible: If your design has a lot of unique specifications, be sure to find your supplier quickly and get started working through these customizations. Once you have a prototype you’re happy with, you can finally start ordering the tools you’ll need to start production.
Use a good manufacturing contract: In particular, use a contract that details your product’s quality requirements and clearly sets out how disputes will be resolved. For what constitutes a good overseas manufacturing contract such as OEM, CM and ODM.
Setting up or buying a facility or entering into a joint venture: Setting up or buying your own manufacturing facilities overseas can be extremely expensive. Be aware that you’ll need to have a large volume of business to make a return on your investment. Running an overseas factory as a joint venture with a local company can reduce the risk to your business.
Communicate clearly: This applies even in English, but it’s hyper-important when you’re dealing with companies based in non-English-speaking countries. Avoid long words or unnecessary jargon, especially things that might trip up machine translation.
Whether you need small, complex components, simple, oversize parts, or something in between, offshore manufacturers deliver products that match your specifications with fast turnarounds and at a fraction of the cost of domestic manufacturing. Overseas sourcing allows manufacturers to compete with less expensive imports. Manufacturing countries such as China often have a larger number of specialized suppliers, making it easier for you to find the exact equipment and state-of-the-art technology you require, all while saving money.