Can Global Sourcing Reduce Your Overhead
Watching the bottom line is key to your businesses survival. So when you ask any accountant or bookeeper about dealing with overhead they will tell you it is never a picnic. While the equation can become rather complicated, the bottom line is that being able to remove many types of overhead is usually seen as being a very attractive development. No doubt this is part of what is fueling global sourcing and manufacturing.
Building a New Manufacturing Facility is Complicated. The option of not building a new factory, for example, is a very powerful and alluring option. The costs savings could turn out to be nothing short of tremendous. And there are additional benefits as well. Building a new factory isn’t just a financial drain, but it is also a brainpower drain. Oftentimes some of your best people will be needed to oversee the development of the factory, and oversee the implementation of the design. In a word, building a new manufacturing facility is an expensive hassle.
Building a Factory May Mean Not Growing Your Core Business. The number of man-hours needed to execute a project of this size and scope are difficult to understate. Further, those hours are ones that are not spent immediately developing one’s core business. This, of course, comes with inherit risks such as being passed by a competitor or having another company beat you to a new technology or a new market. Again, such is the lure of global sourcing.
The Speed of Technology is a Factor. Technology is moving at a speed that were only dreamed of a generation ago, and that has consequences. When your business is building a factory, it is quite possible that a new technology may emerge in the interim and disrupt all of your plans and goals. Thus, building a new manufacturing facility comes with a series of inherit and serious risks. Being able to bypass some of those risk is another reason that global sourcing with a China manufacturer is so very attractive and growing in popularity. In a sense, global sourcing offers an opportunity not just to save on your bottom line, but also an opportunity to minimize one’s risk and exposure.











