Turning The Manufacturing Outsourcing Tide, From The Eyes Of Bremen Castings
By JB Brown, President of Bremen Castings
Over the last 10 years, Bremen Castings has seen a continuous flow of manufactured products purchased by U.S. companies and products produced overseas being imported into the country because of the low cost of making these items outside the United States.
It's no shocker that foreign competitors don't have to spend money on environmental or safety issues or that they have low hourly pay rates. One of the biggest advantages for low-cost producers is the 40 percent under-valuation of China's currency, which is down-right cheating. Some companies look at total costs when purchasing these imported products, and some look only at the price per piece. The companies that look just at the price itself will continue to do extra work and their overheads will steadily increase. They push their problems and financial burdens down to their suppliers. We have already seen this and we don't want to be part of it.
Companies that look at the total cost of purchasing products from overseas are coming back to the USA! I applaud these companies for having common sense and making the correct business decisions. What does it cost to have an 18-week lead time? What does it cost to have an extra warehouse? What does it cost to have your container lost? What does it cost to have your assembly line shut down? The biggest question companies are asking themselves is: What is the cost of quality?
Bremen Castings has successfully had another customer come back to the United States this month. With the increase in shipping costs and the cost of quality, we kick China's butt! Our customer that has been purchasing products in China for the last couple of years is taking a deep breath filled with relief. Their lead time is now cut by 80 percent. They can stop renting a warehouse. They can stop wondering where their products are or if the parts will even make it to their plant so their assembly lines don't shut down. What they are really pleased with is that they are getting repeated quality products manufactured here in the United States.
Buying manufactured products overseas might seem like a great short-term solution to lower a manufacturing company's cost, but with the rise of oil prices and the undisputed waste of money related to doing business overseas, no good business can justify not having products made in the USA. BCI will chalk up another great business coming back to the USA. By the way, did I mention customer service? Put a price on that!
-- JB Brown is president of Bremen Castings, Inc., in Bremen, Ind., a manufacturer of machined complete gray and ductile iron components, http://www.bremencastings.com. His e-mail address is firstname.lastname@example.org.
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