Items Tagged with 'offshoring'

Use the Total Cost of Ownership Estimator (TCO) to make a strong case when selling against offshore competitors! Sixty percent of companies make sourcing decisions based on rudimentary metrics, such as wage rate, ex-works price or landed cost, often resulting in a 15 to 30 percent understatement of actual offshoring costs.

In my December column, I discussed how total cost of ownership (TCO) can reveal the hidden costs of offshoring and determine the real profit and loss impact of reshoring and offshoring.

In our last column, we discussed how “total cost of ownership” (TCO) could reveal the hidden costs of offshoring and quantify the real profit and loss impact of reshoring or offshoring.

In our last column, we identified national policies that will help bring manufacturing back from offshore, thereby improving the country’s economy, employment and budget deficit.

My first column talked about why manufacturing matters most for our country. This month, I want to discuss how chasing cheap prices is not only hollowing out domestic manufacturing but, in many cases, it’s making the companies that offshore less profitable. For decades, consultants and MBAs have told companies to focus on their core competencies—mostly R&D, finance and marketing—and outsource manufacturing offshore. Now, companies are discovering that strategy was often wrong.

It is too little and too late to keep writing “manufacturing matters.” Everything else in the economy is secondary to manufacturing, mining and farming. Only these activities build wealth.