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What Your Offshore Manufacturing Options Look Like Today

Continued developments in the offshore manufacturing sectors provide product teams with a wide variety of options when choosing a supplier. Newer technologies enable manufacturers to collaborate with product designers more effectively and produce reliable goods from multiple offshore locations.

Near and offshore options now include a variety of manufacturing friendly economies for US product teams to work with. Manufacturing techniques have changed drastically in the last decade. Today, factories are moving to agile and creative methods that continue to reduce the overall costs associated with the industry.

Offshore Manufacturing Partners

While economic pressures on Chinese manufacturers continue, other Asia-Pacific countries are emerging as viable alternatives. Among these Vietnam, Taiwan, and South Korea remain the most popular options. Vietnam has made strides in both economic policies and manufacturing infrastructure over the last decade. Taiwan and South Korea have long been manufacturing high-quality goods.  For electronics and technologically advanced products, these countries are also a solid choice.

Vietnam and the Philippines for their part have a lower labor cost and continue to invest in their manufacturing capabilities. Both countries provide alternatives to China, producing electronics and other goods including cosmetics, textiles, and furniture.

Nearshore Manufacturing Options

Both Brazil and Mexico provide “nearshore” benefits for companies looking for a manufacturing partner that is close by. Brazil, in particular, has risen in popularity with product teams and now manufacturing makes up 20% of its GD. Mexico also continues to increase its capacities and capabilities in order to compete with other countries.

Mexico has slightly higher labor rates than Brazil but the added proximity to the US market continues to help the industry grow. Since 2016, the labor costs in Mexico are 40% less than China but that’s not the only reason they remain an attractive nearshore destination. Mexico has also invested in education, opening up more than 120 higher education institutions between 2008 and 2016. This increase in technical skills has done much to positively influence the manufacturing sectors.  The number of science and technology graduates has tripled from 2008 to 2012.

Onshore and US Manufacturers

One of the benefits of improved technology is that onshore manufacturers became more competitive with their offshore counterparts. The rise of the smart factory, additive manufacturing techniques, and system integration now allows many product teams to produce goods at a cost-effective price within the United States. For the first time in recent history, US manufacturing is adding jobs to the economy, showing a strong rise in companies opting to keep their operations onshore.

Working with local manufacturing partners that use advanced manufacturing capabilities can help teams find a solution that provides the best proximity benefits while not necessarily escalating the cost.

Weighing Out Your Options with an Expert

Remember, neither domestic nor offshore factories are automatically and always the best option for every US company and their products. There is much to consider in the total cost, factory capabilities, output, type of product bring sourced, and production turnaround times, to name only a few. There is always benefit in speaking with an expert offshore manufacturing liaison that can help guide your company to a decision that works best.

For the best manufacturing strategy ideas you may not have thought of, and for vetting potential suppliers, call ITI Manufacturing at 888-574-6823. Feel free to speak with one of our experts and let us help you weigh out viable options. As an added convenience, you can also discover if offshore manufacturing is right for you online.

By |2019-11-12T11:26:28-06:00November 12th, 2019|Manufacturing|

About the Author:

Avatar for Mike Stewart
Mike Stewart joined ITI in 2002 and is Vice President of Business Development. He has a BA in Business and Journalism from SFA University. Before joining ITI Mike sold, installed, and trained businesses in comprehensive business computer systems in the medical and automotive industries and served as Executive Vice President of a video news magazine production company.