Made in USA and Total Cost: Six Ways U.S. Sourcing Saves Money


Reading time ( words)

There is no question that manufacturing in countries known for lower labor costs can save money on some projects. In cases of highvolume production, selecting low-cost labor regions close to end markets can generate significant savings and in some cases, fulfill the local content requirements necessary for entry into those markets.

However, when total costs are considered, medium- and low-volume production often doesn’t benefit from working at distance, since crossing borders increases logistics costs, adds internal costs relative to team travel and adds complexity to project transfer and support.

In cases of medium- and low-volume projects, a regional U.S. contract manufacturer may represent a lower total cost than a manufacturer in a low labor cost country. Some of that cost difference is visible, but in many cases, the reduction comes from elimination of cost surprises not evident in unit price alone. Burton Industries, a regional electronics manufacturing services (EMS) provider with manufacturing located in Ironwood, Michigan, routinely sees its customers opt to keep portions of their manufacturing in the U.S. for this reason. Here are six areas where using a U.S. contract manufacturer often saves money.

  • New product introduction (NPI)
  • Logistics
  • Quality
  • Staff support time
  • Production changeovers
  • Responsiveness

New Product Introduction The NPI process often provides the best opportunities for removing cost from the product. Design for manufacturability and testability (DFM/DFT) is one area that can drive reduction in cost and elimination of defect opportunities. Product lifecycle management (PLM) analysis can help mitigate obsolescence risk and/or identify potential obsolescence risk early enough to provide multiple remediation options.

Read the full article here.


Editor's Note: This article originally published in the November 2015 issue of SMT Magazine.

Share

Print


Suggested Items

Excerpt: The Printed Circuit Assembler’s Guide to… Smart Data, Chapter 2

04/21/2021 | Sagi Reuven and Zac Elliott, Siemens Digital Industries Software
Companies have been collecting data in large volumes. Highly varied data from manufacturing operations comes in quickly that needs to be validated, and its value prioritized so that it can be turned into something useful—transformed from big data to smart data. The amount of data available has grown exponentially into big data. Twenty years ago, a PCB work order resulted in 100 data records, megabytes of data; today, it is 10 billion records, terabytes of data. The investment in collecting this data and storing it is high. However, without a way to analyze the data, without analytics, it will not result in ROI.

Excerpt: The Printed Circuit Assembler’s Guide to… Smart Data

04/07/2021 | Sagi Reuven and Zac Elliott, Siemens Digital Industries Software
Whenever we discuss data, keep in mind that people have been collecting data, verifying it, and translating it into reports for a long time. And if data is collected and processes are changed automatically, people still will be interpreting and verifying the accuracy of the data, creating reports, making recommendations, solving problems, tweaking, improving, and innovating. Whatever data collection system is used, any effort to digitalize needs to engage and empower the production team at the factory. Their role is to attend to the manufacturing process but also to act as the front line of communications and control.

What Makes a Great Supply Chain Manager?

04/05/2021 | Timothy McLean, TXM Lean Solutions
Building a competitive and reliable supply chain is a critical success factor for any manufacturing business. This is especially true today, where we face constant volatility and disruption across global supply chains. In this environment, effective supply chain leadership is more critical than ever. So, what makes a great supply chain manager?



Copyright © 2021 I-Connect007. All rights reserved.