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One important consideration when performing a financial analysis of an outsourced manufacturing strategy is to ensure you are doing an “apples to apples” comparison with respect to both quality and OVERALL price.
Sometimes final unit cost (i.e. the cost to get the finished component on the shelves) can be very misleading.
Components produced in a local North American factory can be burdened with pricy engineering overhead, costly technician labour, expensive local packaging, etc.
Some factors to consider when making a comparison:
North American Manufacturing Expenses |
Manufacturing Costs Using Four Winds |
Tooling Costs |
Nominal |
Designer Time |
$0 |
Technician Time |
$0 |
Moulding Fees |
Nominal |
Modification Costs |
$0 |
Staffing Costs |
$0 |
Overhead Costs |
$0 |
Health and Safety |
$0 |
Raw Material Costs |
Similar |
Machinery Expense |
$0 |
Local Packaging |
$0 |
Local Transport |
$0 |
Warehousing Costs |
$0 |
New Investment Capital |
Deposit Only |
TOTAL |
30-50% Less |
When performing a quality comparison, you must also ensure that the unit samples you are comparing are in fact identical to each other.
Left on your own language barriers can confuse such a comparison, and while you may be thinking about two completely identical components, the manufacturer may be thinking something entirely different.
Four Winds expertise can remove this issue for you, ensuring that actual samples are received on time, and instructions are fully understood before pulling the trigger and executing on a large volume delivery.
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