Smart Offshore Outsourcing Benefits You Need To Know

There can be numerous offshore outsourcing benefits for plastic injection mold making, molding, and contract manufacturing companies. The practice has become an integral part of business for many successful businesses. Very few manufacturers are able to keep everything “in-house” these days, in fact, it usually is not in their own best interest to do so.

Nothing stays the same very long, especially in business. What worked in the past can quickly become an out-of-date business model. More than ever, flexibility and creativity are required to succeed. Weighing the pros and cons of offshore outsourcing is an important piece of the puzzle that has become somewhat mandatory for some companies.

Offshore Outsourcing Benefits
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Very often, vast amounts of time, energy and money are spent on the wrong aspects of a company’s core business. This is a classic case of the Pareto Principle, or the 80/20 Rule.

Offshore outsourcing best practices

This well known principle states that 80% of the consequences stem from 20% of the causes. In manufacturing, it often happens that 80% of the profits come from 20% of the customers. This should tell you to spend 80% of your time and energy on that 20%, but it usually never happens.

Too much time and money are spent on work with little or even no profit. These kinds of distractions cost a great deal of money and are often a source of frustration. There are better ways to reduce mold making costs.

Focus on core strengths

Most custom mold makers found out long ago that their time was better spent doing precision core and cavity work, instead of building mold bases, for example. Similarly, your time may be better spent developing new products, or engineering improvements to your existing product line.

Perhaps too much time is spent manufacturing items that could be more effectively made in an offshore facility. The distractions of these non-core aspects of your business can drain precious resources and thus take away from your main area of expertise.

Offshore Outsourcing Benefits
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Smart companies do what they do best an leave the rest for somebody else. Not everything has to be done “in house”.

Outsourcing enables you to focus on R&D
Many successful custom manufacturers of molded plastic products began with an innovative design or a new invention. Naturally, they kept the secret to themselves and produced their new product entirely in-house.

Later, with patents in place and a growing customer base, they found that their R&D suffered. Too much was going into the wrong areas and that spirit of invention and creativity was losing out to the day-to-day operations.

Initially, it might be painful to send work to an offshore supplier, in the long run it often benefits for the entire company and it’s employees. True, this “shedding” process is temporarily disruptive, but when properly managed has positive effects.

Often, an unexpected side effect of offshore outsourcing is the new exposure to different ideas and ways of doing things. This can lead to new areas of R. Now, with a more agile company and engineering department, these ideas can be developed with fewer distractions. The international marketplace is growing exponentially and new products are constantly being introduced in previously untapped markets.

This represents a huge opportunity for custom manufacturer’s who are in a position to develop and market new products. The Brookings Institute has an informative paper on the regulations surrounding offshore outsourcing.
Outsourcing helps to expand into new markets
It often happens that new opportunities present themselves as companies venture into the unknown of offshore outsourcing. Several major injection molders took steps to be in a position to benefit from the global economy by making alliances with foreign companies.

It took quite a bit of doing, but the floodgates opened for them and work just keeps coming.
Some global companies require an offshore presence in order to even do business with them. The world is the marketplace and boundaries are quickly disappearing.

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