It may be appealing to outsource repetition engineering jobs to international companies who provide quotes which are substantially lower than the local manufacturer’s quote. But there are a range of hidden costs of imported manufactured goods which often pop up when going down this route, and these hidden costs are not discovered until the customer is already committed. These can range from lost time due to inefficient communication, to the indirect costs resulting from complications such as project delays, which may arise due to increased incidence of quality related issues.
International manufacturing companies which offer undercutting quotes, tend to cut costs themselves, by means such as using low quality or outdated machinery or techniques, cutting corners in their machine maintenance, or overworking staff. All of which lead to poor quality products, with a lower reliability of production. What this means to the customer is that there may be a high rate of rejects. In the best case this is detected during the manufacturing process, and only resulting in only minor delays. However, if this isn’t detected until the shipment of manufactured components are received by the customer, there can be major delays while the issue is rectified.
There are a number of costs associated with these kinds of delays. One of the first costs that may arise is the indirect cost of staff hours required to rectify the issue. Such as the time required for communications with the supplier to negotiate how to proceed. Another potential issue requiring additional staff time is the planning time necessary to plan how to work around the delay, and mitigate negative impact on the project schedule. Another indirect cost from the delay to the customer’s operations is the negative effect on cash flow due to project delays.
The process is a straightforward matter for local manufacturing. However, when the manufacturer is located internationally, whether dispatching your own staff or subcontracting quality control, it becomes a more time consuming, and therefore costly process.
There may be additional indirect costs associated with shipping and importing. While the direct cost of importing and logistics may be covered in the quoted cost, there is often additional time required to make the necessary arrangements, and again this indirectly increases the cost of the project by reducing staff productivity.
When you need to communicate with an international supplier, there may be additional effort required to coordinate the right time to communicate verbally, due to time differences. When there’s a time difference involved you can’t always just pick up the phone and talk to your supplier. This may not seem like a major issue, but over time it can add up to significant lost time, deteriorating productivity. On top of this, your supplier may not have staff on hand whose first language is English, this increases the risk of miscommunications. These kinds of miscommunications are another potential cause of project delays, with the resulting indirect costs as already mentioned.
When you opt for the local manufacturing option, the upfront cost may be higher, but there won’t be any unpleasant surprises along the way. Most of these costs are not readily quantifiable, and can be overlooked when comparing quotes from various repetition engineering workshops. When you get your repetition engineering done with a local manufacturer, not only do you eliminate the capacity for these issues, but you are also able to build an effective long-term partnership with your local manufacturer. This kind of long-term partnership leads to increased efficiency and productivity thanks to reliable and effective communication channels.
JGM Engineering is a Repetition Engineering Workshop based in Penrith, Sydney NSW. We specialise in quality and precise machining of customer components. A highly skilled staff with over 30 years of experience in the engineering Industry. We offer small to large production runs on our automated CNC machines.