Larry Butz GEA Consulting La. Crescent, MN
Agenda n n n n Why Manufacture Overseas Types of Manufacturers Finding a Manufacturer What to Expect Evaluate the Differences Risks “Insourcing” Advantages
Larry Butz President and Founder GEA Consulting 20 years with Trane specializing in – Product Development – Technology & Product Globalization – Technology Transfer & Factory Start-up – Environmental Sciences Five Years as Engineering Manager in France
Why Manufacture Overseas? n Lower Cost Product n Access to Overseas Markets
What to Expect n n n Lower labor costs Lower raw material prices Lower component/subassemblies costs Range of quality levels available Fewer constraints (regulations) on factories
Where to Manufacture? Forbes Top Ten for Outsourcing India n China n Malaysia n Czech Republic n Singapore n Philippines n Brazil n Canada n Poland n Chile n
Types of Manufacturers n n n State Companies Wholly Owned Locally Joint Ventures Wholly owned Foreign Your Own – Build or Buy
How to Find n n n Government Agencies Industry Directories Web Bidding Networking Shows & Exhibitions
Be Prepared for Change n n Longer Pipeline Reduced Flexibility Change Control Cultural Differences n n n Societal Value Systems Language Business Customs National Laws
Be Prepared For Change n More Administrative Personnel n n Logistics - Import/Export Banking/LC/Currency International Law Communication n n Time Difference Language
Product Modifications The relative cost of equipment vs. labor is significantly different. Expensive labor saving equipment used in the US may not be the best choice overseas. Be prepared to make minor changes in your design specifications to obtain best results.
Evaluate the Differences n n n n Location Legal/Patent Language Cultural Resources Political System Logistics n n n n Taxes Laws Safety Standards Currency Infrastructure Environmental Business Customs
Risks n n Currency Variations Proprietary Design Info Political Stability Hidden Costs
Hidden Costs Packaging n Communications n Import/Export Taxes n Waste/Shipping Damage n Legal n Product Redesign n Administrative Personnel n
Do Your Customers Care……? ? ? Where your product is made? n What the working conditions are? n Environmental impact? n Does “Made in America” have value to your customers? Today? Tomorrow?
Advantages of “Insourcing” Quicker Response Times n Flexibility (“Specials”) n Customer Visits to Factory n Proximity – Designers & Manufacturing n
Opportunities to Grow Customer Intimacy n Emerging Customer Needs n New Products n Service your Product n Partnerships n
Thank You for Your Time Larry Butz GEA Consulting, Inc 2420 N. Pine Creek Rd. La. Crescent, MN 55947 Tel: 1 -507 -895 -6826 Fax: 1 -507 -895 -4001 Email: LButz@gea-consulting. com www. gea-consulting. com
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