Cutting costs using an overseas manufacturer

In today's competitive market companies are quickly seeing the need to deliver to the market the most cost effective product they can.In order to do this these companies are choosing overseas manufacturing as a way of cutting cost and increasing profit.This allows the parent company to deliver the most sophisticated products that today's business and consumer markets demand.And this allows the company to still be profitable against tighter time and cost targets.Yet as they do these manufacturers are creating ever more complex, multi-dimensional, and highly collaborative supply chains. These chains may involve more organizations than traditional linear supply chains and the relationships between their activities are more complicated. If any piece of these value-adding organizations fails to meet its objectives, the time, budget or quality that has been targeted the whole project may be jeopardized. So managing the entire network effectively is critical.The project management challenges continue to grow as the number and diversity of suppliers grows.This may include several different players that are located on different continents and vary in size from just a handful of people to many thousands. Regardless of their differences, all of these organizations and their activities must be coordinated and controlled in order to achieve the project goal.Here are some tips to cut costs while using overseas manufacturing:

1. Develop a consistent management methodology.The management methodology must be simple and familiar enough to apply to the smallest company yet provide the sophistication that larger manufacturers need to manage programs and projects.All appendages of the company must be unified in purpose but this is especially true for an off-shore or overseas manufacturer.Consistently using the same method of management helps cut down on personnel and production errors.
2. Provide complete access to overseas manufacturers to all aspects of technology support.Many times production problems occur when overseas manufacturers cannot quickly access needed IT support to keep production up and running.This results in costly delays in manufacturing that could have easily been avoided.
3. Remove the gap between the planning and the execution process.To often time and language do not translate the same. Ensure that there are more than adequate support personnel to ensure a smooth transition to the production phase and eliminate needless delays.Time that is not spent in production is time not only wasted but not making any profit.
4. Insure a process is in place for inventory optimization. The overseas manufacturing process can be costly if the manufacturer must wait for needed inventory from other supply chains and delay the production process.If a cross-inventory system (parent company to manufacturer and back) is in place from the parent company then it is extremely crucial that the needed inventory management is in place on both ends.Inventory optimization is ultimately about getting the right mix to ensure high service demands.
5. Have a system of performance management in place for all levels of the company.This is especially essential for using overseas manufacturers.This is a valuable time-saving tool that will increase profitable.The correct system of performance management must be determined by the needs of the company and the current demands of the market.
6. Finally, ensure that the Human Resources department of all aspects of the supply chain is adequately equipped to deal with personnel issues that may vary greatly from region to region.Personnel represent a significant percentage of cost in any manufacturing process.It is crucial that cultural differences be recognized when dealing with companies that may be operating in a different time zone, social and political environment.