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July 28, 2016

Top 10 Lessons in Offshore Manufacturing (from a Manufacturing VP)

Taking production overseas can be intimidating. Daunting. Downright scary! We get it. Lucky for you, we've done the dirty work. As a contract manufacturer, East West has learned countless lessons over the course of our 15 years in the game, and we're ready to share the knowledge. Take it from us it pays to keep calm and carry on (as our British cronies would say).We've found that the benefits of going offshore outweigh the risks, and the outcome has worked in both our favor and that of our long-standing customers. Keep scrolling to soak in the wisdom of our executive VP, Jeff Sweeney, who's had skin in the manufacturing game his entire career as an engineer and East West executive. Take it from here, Jeff!

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I get asked all the time well, as many times as an engineer can be asked "Jeff, what have learned in all your years of manufacturing overseas?" So in the spirit of a good list, I've come up with my version of the Top Ten Best Practices. Here we go:

1 |  Don't overlook the domestic. To successfully manufacture offshore, an organization must first have the capabilities and then take the time to understand what the 'domestic' customers' requirements truly are.

2 |  Feet on the street are necessary. The model only works with a significant presence in each country of manufacture (whether working with sub-suppliers or a fully owned factory) to understand the local culture, negotiate the best pricing and manage suppliers’ performance.

3 |  Manufacturing is not performed by brokers and importers. Customers are best served working with a supplier that has expertise and proven experience to actually make products and manage the supply chain.

4 |  This is not a zero-sum game. The additional competitiveness achieved via targeted, strategic outsourcing inevitably leads to growth (in both sales and domestic jobs) for customers.

5 |  Trust, but verify. You only receive the performance and quality level for which you ask and to which you inspect. Those expectations must be clearly set, consistently communicated and inspected for in each shipment.

6 |  A transparent supply chain is key. We qualify suppliers on critical capabilities, agency (UL, CE, RoHS, etc.) approvals, competitiveness, IP stewardship, safety and labor practices, just to name a few.

7 |  Diversify, diversify, diversify the supply chain. Whether among suppliers within a single country or in two or more countries, diversity in the supply chain provides security, flexibility and maximum competitiveness.

8 |  Are you really ready to go offshore? Mature products fit best. While offshore manufacturing can be implemented successfully for well designed new product launches, products with some history, a proven sales track record, and predictably high volumes offer the best results.

9 |  Offshore manufacturing is not “one size fits all.” For reasons of strategic core competencies, specialized material or process unavailability, freight considerations and cost make-up, every part or assembly may not be a good candidate to be made overseas.

10 |  Murphy's Law! Murphy is a world traveler, and his law applies everywhere — if it can go wrong, it will. It takes proven systems and experience to deal with the inevitable speed bumps that naturally come with sourcing and producing goods overseas.

East West has been running operations in Asia for 15 years. Clearly you are free to blaze your own trail and learn these same lessons for yourself. My only advice to you: Please take our advice to heart. Save yourself the time and trouble. Whether you manage your own global supply chain or seek the advice of a company like East West to perform the service for you, you will be at least 10 steps ahead of the game.

—  Jeff Sweeney, EVP/CMO

Related Reading:
6 Benefits of Making Your Products Overseas: Part 1
6 Benefits of Making Your Products Overseas: Part 2
When to Consider Moving Production Overseas: A Mfg CEO's Insight

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Filed Under: Manufacturing, Offshore Expertise