Domestic Parts-Suppliers can be More Profitable

Is it really cheaper to have my metal parts manufactured in China?

Are you debating between foreign or domestic suppliers? Remember, they will likely not be competitive for labor costs. Because Chinese companies know they have the world beat on cheap labor costs, they have found little need to work on innovation or to improve their process inefficiencies. That lack of innovation and those “process inefficiencies” can have devastating results to a production company trying to save money. You must consider the hidden costs of using a foreign supplier. You must look beyond the initial quote.

Costs a buyer should anticipate when using an off-shore supplier:
  • Financing & Fees
  • Duties/Tariffs and Warehousing
  • Lift and storage fees at port of entry
  • On-Carriage costs (transportation in buyer's country)
  • Opportunity cost of money that is committed for 3-6 months as compared to 1-2 months
  • And there are other problems to consider…
What good is a reduction in labor costs if you are paying exorbitant transportation costs? If you have to struggle with language barriers and market misunderstandings when there is a problem? Are the savings on labor going to override the sometimes-radical fluctuations in currency between two dominate economies? Is it going to pay for emergency shipments using costly air freight when you need an adjusted quantity quickly?

Why using a domestic parts-supplier can make you a more profitable production company:

Reducing transportation and storage fees and eliminating delays are part of Lean Production practices that increase both your profit and value to your customer. The most effective way to do this is to choose suppliers close to “home”. The benefits are immediate and relevant:
  • Savings on ocean and air freight charges
  • Easier response to quality control and service when issues arise
  • No language and communication barriers
  • Completely eliminates fees for port of entry, lift, carriage costs, and duties/tariffs
  • Faster delivery times, helping you “order as you need it” without a long wait

Avoid choices that can lead to expensive profit loss!

If you are comparing bids that include labor costs, materials, and initial estimates for time and service, the surface numbers may seem uncompetitive and clear. Sound supply-line management understands there are hidden costs that lead to much more expensive reality than an off-shore supplier may claim. You can improve your service and value to your company buy choosing domestic suppliers that are faster, more reliable, and more innovative than your competitors.
 
Unique Tool & Manufacturing is a domestic metal parts supply company and manufacturer that can set you apart from the competition. Because they are an American company, you can eliminate the hidden expenses that come from off-shore choices. Their quotes for cost and service are reliable; you can trust what they say and pass the value onto your customer base.To speak with someone who can supply you with customized stamping products or help you examine your own production practices, call 1-734-850-1050 or send us a message using the contact form below.
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