Who Is Ki Technologies?
We help manufacturers
build successful, high quality products; maintain profitability;
and save time. We cross borders, so you don’t have to.
Sensible Offshore Manufacturing
This article discusses the pros
and cons associated with offshore manufacturing outsourcing
and how applying the following strategies can curb potential
difficulties while achieving maximum bottom-line savings
and product quality.
- Development of a comprehensive
business case
- Proper risk management
analysis
- High-level adaptation
of manufacturing approach in offshore location
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Benefits of Offshore Manufacturing
Outsourcing:
One of the main
factors that contribute toward a company's success
is the cost of production and operation. Offshore
outsourcing, refined over a period of time is
one of the factors that have succeeded in reducing
the cost of producing goods and services effectively.
Organizations that have been able to execute a
well-planned and articulated approach to offshoring
have achieved savings in operating costs, which
in turn contributes towards the company's growth.
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Profitable companies
sustain themselves through innovation. Lowering
operating costs means they have more money to
invest in innovation, resulting in a stabilized
domestic workforce.
Since all companies today face the identical
challenge: increase revenues while reducing costs,
and with limited resources. Market pressures and
the need to assure future growth are forcing companies
to find cost reductions of up to 30%. Against
this background, off shore outsourcing has become
a viable solution. |
| Did
you know? |
| Ki Technologies
has over 75 years combined experience specializing
in assisting US-based OEM customers in reducing
manufacturing costs by outsourcing to factories
in Asia. Ki Technologies has close ties with India/China
manufacturers. Thereby, customers receive the benefits
of offshore manufacturing without having to become
an offshore expert. |
Potential Problems:
Because enterprises often initially
fail to plan and take into account the significant risks
and challenges associated with such offshore manufacturing
transfers, significant problems often develop.
The challenges
typically lie in one of four areas:
- Lack of clear strategy, and
inadequate business case
- Mismanagement of set-up or
transfer
- Low product understanding/expertise
- Difficulty managing local
cultural differences
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In
light of these occurrences, the question arises:
how can companies achieve the maximum benefits
from offshore manufacturing, or at least improve
their current situation?
The answers lie in the rigorous execution and
management of these complex projects, together
with timely implementation and risk assessment.
By incorporating these strategies companies have
typically been able to achieve savings exceeding
15% and still maintain a high level of quality.
|
| Did
you know? |
KiTech Outsourcing Services Offer:
- Reduced overall product cost
- Reduced Capital Expenditures, such as costly
manufacturing equipment and facilities
- Increased Operating Leverage
- Built-in ISO Certification
- Flexible contracts
- Quick ramp-up time / shortened lead time
- Reduced warehousing cost
- Improved materials management and shipping
cost
- Economies of scale
- Built-in ties to government regulators / decision
makers
- Bi-national and bi-cultural staff of experienced
experts
- Improved cash flow
|
Further Solutions:
To harvest the full benefit of the
offshore environment, these practical strategies can
be applied to increase potential success while reducing
risk:
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1. Establishing a reliable business case: This requires a
knowledge of the target countries, experience
with transfer, and the competence to evaluate
the risks. Such capabilities will allow organizations
to analyze and evaluate all the relevant cost
and risk factors, including all product target
costs (logistics, duties, taxes, sourcing), reduced
productivity and all staff costs - not only workers.
2. Professional project management:
Many companies also underestimate the need to
develop the receiving site before and after the
actual transfer. Cultural differences between
sites often have a negative impact, especially
on quality and performance.
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Therefore, migrating businesses must ensure
the receiving site team is involved early and
is aware of all the issues associated with not
achieving customer requirements.
3. Know-how transfer: The technical and product
know-how can be achieved through the wide ranging
transfer of skills between the sending and receiving
site. This involves staff from the sending site
supporting production start, permanent transfer
of experienced management, and key expertise and
the training of staff from the receiving site
throughout the transfer process.
|
| Did
you know? |
| - In 2009 -
72% of companies will be sourcing products from
China and India...without effective management.
Source: A.T. Kearney, 2/2006
- Through their comprehensive management strategies
KiTech makes offshore outsourcing: easy, productive
and cost effective.
|
| Summary:
When proper attention is given
to planning and executing offshore manufacturing
outsourcing, significant benefits can be achieved
to an enterprises’ overall bottom-line in terms
of both quality and productivity. By incorporating:
- Development of a comprehensive
business case
- Proper risk management analysis
- High-level adaptation of
new marketing technologies and processes
Significant problems can
be reduced, and the maximum benefits can be achieved.
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About Ki Technologies
Ki Technologies is a US based
procurement partner, with a global reach.
Our unique value comes from our hybrid skill set, strong
global sourcing experience, and engineering allied with
technology. Using manufacturing industry best practices,
we assist our clients in reducing product cost and delivering
high quality products.
Give us a call to discuss how
we can help you cut manufacturing costs.
Phone: (248) 668-8000
Email: Services@KiTechnologies.com
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Technologies, Inc.
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P: 248.668.8000 | F. 248.668.8159 | E:
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