Outsourcing jobs such as manufacturing has always been a conversation offered from different views. For some, the impact is too risky and costly. Those believe that jobs should not be outsourced and this idea can help our economy. While others believe that outsourcing creates more jobs and opportunities within their companies because they’re able to afford to hire more staff. Whatever you believe, here are some things to keep in mind when it comes to overseas manufacturing.
Loss of Control
One impact that overseas manufacturing has is the loss of control that companies have over their manufacturers. When companies send out production jobs overseas, they lose the ability to know where their products stand in the process of production. This also comes with the fact that there will be plenty of miscommunication overseas as companies don’t have the ability to quickly respond to situations that may result in product damage or recall. Careful management and boots on the ground in those overseas facilities can help mitigate risk.
Overseas manufacturing impacts the Canadian job force. Although sending work overseas can be cheaper, there is associated added costs with product damages, shipping, and transportation. By creating manufacturing jobs domestically, companies can actually save the money, time and hassle that it takes to work with companies overseas. The controversy of workplace abuse and poor working conditions overseas continues to be a reality. This is another reason why it is cheaper for companies to outsource jobs abroad but risk exposing employees to these conditions.
Shipping and Transportation
The next impact that overseas manufacturing creates is the cost and ability to ship and transport products and goods. Since the early 2000’s, the price of oil has more than tripled in price, which makes shipping more expensive. The other factor to consider is the amount of time it takes to ship these goods to North America. Not only does it take months for manufacturers to create the goods, but shipping can take just as much time or more (typically a few months). This creates competition within the industries. Companies that work with domestic manufacturers are able to get their products out to the market much faster, while solving issues and problems at a quicker pace. Another frequent argument comes with the fact that transportation and shipping services are contributing to greenhouse gas emissions. Before you decide whether your company should manufacture overseas, be sure to weigh out the costs and consider domestic production and local short haul transportation.