Offshoring manufacturing for cost, like outsourcing in general, does not result in a net cost savings. This is mainly because of hidden overhead costs and because it inhibits, compromises, or thwarts 6 out of the 8 cost reduction strategies. Halfcostproducts.com reports:
When measured on a total cost basis, manufacturing offshore for sale in the U.S. rarely results in a net cost savings, considering differences in labor efficiency and all the costs of shipping, quality, inventory, communications, travel, training, transferring products, support, and complete sets of equipment needed for any manufacture.
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