Manufacturing, USA vs. Abroad

Lately, I’ve been looking for manufacturers for an injection molded project I’m working on. Requirements at my previous job forced us to source parts in the US, and most of our work was CNC’d aluminum, so exploring overseas suppliers is a new prospect for me. There are some clear advantages to staying in the US and I thought I’d talk about the pros and cons running through my head.

Trust

The first concern I have with a supplier is trust. Can I trust them to make quality goods and deliver on time? In the US, I feel like basic interview questions and social cues will lead me to conclude whether you’re a worthy supplier or not. I can call you on the phone (because at most you are a few time zones away!), communicate with you in fluent English, and also check your references, who probably also speak English. If I want to meet you face to face, your factory is at worst a day’s travel and several hundred dollars for the plane ticket. Finally, if it comes down to it (and it probably won’t, but just in case), I could imagine suing an American supplier in the U.S. If I was overseas, I wouldn’t have a clue.

Logistics

When you’re in early development phases, shipping samples back and forth can be crucial. No amount of math, analysis, or simulation will substitute for a fit check, or to review final part color and surface finish. You can get small parts across the US in less than 3 days for under $10. Ground shipments of major deliveries will make it across the country in less than two weeks. A slow boat from China, on the other hand, could take a month, or you’d have to pay the money for air freight.

Ethics

Although the US has had it’s fair share of scandals about factory conditions, I feel generally better about manufacturing in the US, than in a country where  infant milk formula was poisoned, or factory workers toil under dangerous conditions. Will plastic parts have BPA, phtalates, lead, or some other toxic substance in them against my directions? Can I pay for a lab to test samples?  Then there’s the additional ethical choice to move American jobs abroad.

Cost

Of course, the big elephant in the room is labor costs. Labor can cost ten time less overseas than in the US. The risks of working in another county can be mitigated by sending someone in person to vet the supplier, but of course, that costs money, too, and you’re essentially paying a lot a lot of money to manage the risks.

Practical Issues of Availability

I’ve tried working with mfg.com for the first time to source a supplier. I’ve received 25+ bids on my project, only two companies were based in the US, and even then, they just had US offices, the work was really done in China or Korea. Finding a US supplier will take more work on my part.

Conclusion

Given the volumes I’m working with and the difficulties of working abroad, I’d certainly prefer to stay in the US, but the experience has certainly been eye opening as to what’s out there.

 

7 responses to “Manufacturing, USA vs. Abroad”

  1. Sam

    Speaking of costs, manufacturing can be affected massively by companies outsourcing to other countries, it’s how local industry starts to suffer because someone elsewhere can offer a better price. It’s a big shame.

  2. gasstationwithoutpumps

    I’m facing a similar question on a smaller scale for printed circuit boards I’ll need for a lab course. I have tried out 4 different PC board prototype companies for different projects. Two make the boards in China, two in the US. Delivery time is about 2–3 weeks for all of them, though I can pay more for faster delivery from any (only the most expensive, a US company, does really fast production and delivery, but they charge a lot more for the fast turnaround). I’ve not seen any difference in the quality of the boards (but I’m not doing cutting edge design here—these are 2-layer boards with old-fashioned through-hole parts).

    Since I’m talking tiny quantities and deadlines that aren’t tight, I’ll probably end up going with the cheapest source (from China), rather than the second cheapest (from the US).

  3. ferd

    Sometimes you can only get what you need overseas. It feels unpatriotic, but if it’s reality then I just go with it. I will give preference to local suppliers, but in the end I need quality and quantity on schedule. Whoever can provide that wins.

    Sometimes being stuck with few sources really kills your own schedule. While trying to source electric motors of a certain size, we talked to an importer in California. He was getting a similar motor from China, but quality was terrible. He has to hand test every new motor, and over 70% were failing. He could fix some of the failing units, but overall he was throwing away 50% of his purchases. If this was a U.S. manufacturer he could probably raise Cain and receive better yield. But only a very few companies manufacture the motor he needs (none in the U.S.), and without alternatives he has to do all of this cherry-picking and pass its costs onto his customers.

    I can understand where the poor quality is coming from, if workers work in bad conditions for low pay. We’ve brought it onto ourselves. We’ve demanded stuff that is more and more complex, but for cheaper and cheaper prices. If we were willing to pay a reasonable amount more we might win manufacturing back to the U.S. But our stagnant economy may force us to keep dealing deal with poor quality. Anyway, that’s been two major issues for us (whether going offshore or not): availability and quality.

  4. ramiszaro

    While comparing with all other industries , manufacturing was little bit low in making the products in an essential way so that finding the best with all the av ability to trust the working force behind every manufacturing companies to extended level will make the US Manufacturing in Initiating the Industrial services.

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  6. Dom@civil Engineers Nottingham

    I suppose the trust element is a major one, however if somebody mentions manufacturing, i instantly think of Asia, and when i say Asia you know what i mean, i do not need to elaborate, there are some great points here however there are many more positives you have not included for the aboard approach

  7. Paul P. Coker

    “Foreign” comes in various flavors. There are a lot of US companies that now have plants, or partners or subsidiaries, in Mexico. If the company is quality oriented, after a settling in period of a couple years, those plants can produce high quality product at decent prices. On the ethical side, helping Mexico feed it own people may somewhat inhibit the flow of illegal labor into the US, which labor undercuts our native workforce and makes blue collar jobs hard to come by at a legal minimum wage.

    “Overseas” can mean different things depending on what you are buying. If life/safety or large bank accounts (high priced projects or clients) are at stake, don’t trust China (land of poisonous food exports and pot-metal lifting harnesses). Other Asian suppliers tend to be more scrupulous. Europe and Israel may be competitive for more sophisticated technology items, and the quality there is more enforceable.

    Take a page from Toyota’s recipe for success. Plan on the expense and time of working very closely with your supplier, whoever/wherever. Have someone onsite there “frequently” (whatever that might mean in your industry), and structure contracts to encourage cooperation, not secrecy. If the relationship is cooperative, rather than exploitative, that will impact both price and quality in a positive way. Some believe this approach leads to higher costs, but that is a false and narrow perception. It leads to cost *savings* in a big way, in the long run, as well as better performance by every other measure. Don’t underestimate the cost of misunderstanding and poor/unreliable quality.

    This includes cooperative engineering, where you may make small changes in your design to better fit your supplier’s manufacturing abilities. That requires trust and communication on both sides, but can yield big dividends. And as for reliable delivery, who is the supplier going to put at the head of a tight production schedule; someone who squeezed him for every cent and will take him for all he’s worth, or someone he likes, trusts, and who is committed to his success as well as their own?