Why Manufacture Abroad?

It all depends on your perspective doesn't it. If you work in an industrialised country, in a high technology manufacturing facility which is clearly profitable, why would you want to do a thing like that?

Well that is exactly what many successful companies will do and it begs the question why?

As manufacturing methods employ more control technology and automation, we can ensure the level of quality control that we require. This enables us to duplicate any manufacturing facility anywhere in the world.

The key to this strategy is intelligent site selection. Low wage stable economy, willing workforce, education culture, stable social structure, stable logistics and utilities.

Good Project Management skills are a pre-requisite given that the whole thing has to be shipped, built and manned by a capable team. Often senior management will go with the plant to oversee its start up and staffing.

In Favour

• Proximity to target markets
• Proximity to a low wage workforce
• Political incentives; grants
• Proximity to raw materials
• Reciprocity; reduced trade barriers

Against

• Shipping costs; return goods to UK
• Lead Times; return goods to uk
• Some quality issues, especially during startup
• Unpredictable local conditions
• Existing customers may change suppliers

The reduced cost incentive should not be limited to wages alone. In the industrialised countries employee benefits are high, hours are limited, pension rights, sickness benefit, holiday entitlement and health and safety legislation all help to price our workforce out of the market. The more recent compensation culture has also done little to advance the case for domestic manufacturing.