“Before you consider outsourcing to China,” Fabin says, “you might want to consider which aspects of production it makes sense to outsource. You need a clear picture of your total supply chain cost.”
Another example about not being blinded by low China labor costs. Companies need to consider the costs of increased complexity as well as the 5-6 week trip across the ocean. I’ve read other accounts that say if a company has to ship even 10% of product by air freight, rather than by ocean, that China outsourcing savings can evaporate.
Thanks for reading! I’d love to hear your thoughts. Please scroll down to post a comment. Click here to receive posts via email.
Now Available – The updated, expanded, and revised 3rd Edition of Mark Graban’s Shingo Research Award-Winning Book Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement. You can buy the book today, including signed copies from the author.