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Outsourcing manufacturing, what you ought to know

As most of you are probably already aware of outsourcing is a thing that companies can do to help them reduce their overall costs. And the thing about outsourcing is that it can be done with almost any aspect within the company. Many of you are probably familiar with the fact that more and more companies are outsourcing their customer service, such as call centers in India, but what some of you might not be aware of is that companies are now starting to outsource manufacturing as well as accounting, customer service, payroll, etc. In other words outsourcing is hiring another company to perform a specific job task for your company, but the thing that is so great about outsourcing is that it doesn't have to be outsourced in this country it can be outsourced anywhere.

Here are some things that you should know about outsourcing your manufacturing.

Item one:
One thing that you need to be aware of is that outsourcing is a great way to help reduce overall costs. The reason that it helps to reduce overall costs is because many companies will outsource to a different country which has lower labor rates and supply costs, so by building a manufacturing plant in that country they are able to save on their overall costs. And the best thing is that the gain more assets at a fraction of the cost, for example the new manufacturing plant that was just built.

Item two:
Another thing that you need to keep in mind if you are considering outsourcing to another country is that not all countries have the same laws or regulations that the United States has. What this means is that the people who will be working at your manufacturing plant do not have to follow the laws and regulations that are passed in the United States, but the plant is incorporated in the United States o it must abide by the United States laws and regulations, including what is o.k. to ship into the country and the correct parts and supplies being used. So if you are outsourcing to another country you are going to want to make sure that they are properly trained to manufacture your products to the United States laws and regulations.

Item three:
Another thing that you need to be prepared for if you are going to outsource to another country is the shipping delays that can arise and it doesn't matter if it is a finished product or a part of someone else's supply chain. Because you are outsourcing so far away the opportunity for confusion and disruptive events is increased dramatically, and if you are unprepared for this problem you can lose the savings that perhaps made you decide to take advantage of outsourcing. But the good news is that you can help to solve these problems, although there are still going to be delays and there is no way to avoid them, but if you plan and prepare for those delays ahead of time by building them into your supply chain you will still have happy customers and save on costs.

Item four:
Most people see that outsourcing is going to save them money on labor costs but what many people don't see is that there are other ways that outsourcing can save you money. Outsourcing can also save you money real estate, insurance, and utilities not to mention that it can also make you money. One of the ways that outsourcing can make you money is by selling your old production equipment that your company no longer needs because it is outsourcing.

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