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Are you considering joining the stampede to outsource to China?

Ever since the 1990s, when the United States Congress passed a law to allow incredibly low import taxes on Chinese imports, you may have been thinking about it. Have you been putting off the decision to give in and join all those other companies who have already outsourced their manufacturing work to China? Maybe your investors have been pushing you to give it a try? Your stockholders just want to cut costs to increase profits. Are your customers ready accept seeing Made in China on your products and give up Made in USA?

Well now it seems that outsourcing all your manufacturing to China is not as good as everyone thought it was. It turns out that there are many reasons not to. These reasons have led some companies to pull back on plans to outsource work that they are currently doing here in the USA. What is happening?

Here is a list of the top 5 issues faced by U.S. companies.
1. U.S. Companies are learning that the quality problems are ruining their reputations that took decades to build. These quality problems can appear suddenly and be hard to solve from so far away. A shipping container full of defective parts means you are finding defects too late (after your parts get here instead of before they leave the factory).
2. U.S. Companies are realizing that there are logistical difficulties that come from using a factory that speaks a different language and is in a time zone 12 hours opposite the USA. Email is good but not all your words will translate properly when they read your email and translate it into Chinese.
3. U.S. Companies are finding that their intellectual property can be copied and sold to Chinese competitors who then flood the market with low cost copies. This has happened to too many American companies and the courts are too slow to stop it.
4. U.S. Companies have to pay a lot of money upfront to relocate their manufacturing tooling and train Chinese workers how to make their products. Many U.S. companies are having to send employees to China for time consuming product launches.
5. U.S. Companies are not saving as much money as they did 10 years ago due to higher wages and higher shipping costs, and now the smaller cost savings often do not justify all the problems.

The solution? Do the math and think about all the prestige you keep and control you mainain by making your products in the USA. Maybe the answer is to continue to manufacture your products right here in the USA. Just ask your employees for suggestions to help you help them make it worth it. :-)

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