Considering more than China’s labor costs

SupplyChainBrain: The Library:

“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.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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