So you have a business with a great product, but you're looking for cheaper methods of manufacturing. Commodity managers, materials managers, and sourcing engineers have big decisions to make in regard to finding the right suppliers for their production parts at the best total cost.
Should you look for your own manufacturers in Asia or a low-cost country (LCC) outside of Asia? Or should you use a sourcing integrator that already has an established global manufacturing base? Below are four reasons why it makes sense to outsource your components through an integrator:
1. Lower Costs
It's no secret that labor costs in countries like China, Taiwan, and India are significantly cheaper than U.S. labor costs. Using overseas manufacturing plants can greatly cut down your production costs.
2. Build Relationships
When you use a sourcing integrator for your overseas production, you reap the benefits of numerous resources that are available to them. The overseas connections and solid understanding of each country's cultural barriers represent key reasons why you should let an integrator serve as your business's intermediary.
3. Consolidate Suppliers
Having too many suppliers to deal with for the parts you need for production will only further complicate the process. One benefit of using a global sourcing agent is that they will handle all of the logistics and act as your single point of contact so that you can shift more of your focus where it matters.
4. Reduce Inventory and Lead Times
A quality sourcing integrator will provide stocking programs that help you reduce inventory costs and lead times so that you won't have to hold all of the inventory on your end. They will take forecasted demand into account to make sure you have the parts you need when you need them. CSI can increase your working capital by holding inventory, which reduces your upfront investments and holding costs.
To learn more about sourcing through an integrator, contact CSI today.