First-rate mold solution company provides service for offshore outsourcing, but that kind of service has advantage and disadvantage, today, we want to explain a disadvantage of offshore outsouring in the following:

Misleading cost reductions expectations. You cannot just take a figure such as a 40% reduction in wage expenses. In reality, most companies experience far less than expected, at least in the beginning of the learning curve. As they progress up the curve, the savings increase.

Data and information security. Steps must be taken to ensure that proprietary information is safe. In reality this is rarely a problem, but it is important to address this issue up front. The requirements must be defined and documented.

Consistency in product and process. Many manufacturers find that it takes substantial effort to communicate the need for consistency. It is one thing to mold a nylon part in your own machines with your own molds and controls, but it can often be quite a different story when an offshore company is doing it without following your process exactly. It can also be maddening to communicate this effectively.

Loss of business knowledge. Perhaps your company has developed a unique process for a certain application. Once you reveal that to your offshore supplier, it is open to the world. Steps must be taken to ensure the confidentiality of your knowledge.

Vendor fails to perform. Companies must have a contingency plan in the event that the supplier fails to come through as planned. It can and does happen that the supplier is unable to perform as promised, either due to a lack of ability or some other reason. You must have a back up plan in this case.

Price creep. Some companies are unpleasantly surprised when the costs are more than planned. Make sure your contract takes this into account. If the price is not “fixed”, it can creep up and negate any cost savings you had hoped for.

Government oversight and regulation. Some industries, such as electronics, have strict guidelines dealing with offshore outsourcing. Government controls have dramatically changed with the Patriot Act and the Sarbanes-Oxley Act. These place a greater burden on American companies.

Culture. Though English is the international language of business, it does not take very long to find out that communication is a challenge. Your business partner may nod his head and agree with you, even when you speak total nonsense, just to see if he actually does comprehend you. this language and cultural hindrance can wreak havoc with your plans.

This can, of course, be overcome, but it must be recognized from the start. Never take it for granted that you have been properly understood. Personally, I speak several languages, and have lived abroad several times. I know from first-hand experience how easy it is to glide along, or put your foot deeply into your mouth!

Turnover of key personnel. With the rapid growth taking place in China and India, it is not uncommon for key people to find new jobs and move on. This can disrupt your flow of information dramatically.

Knowledge transfer. This is often overlooked. The amount of time and effort to educate the new vendor can be substantial. It may, and often does, include numerous trips abroad, endless conference calls, emails and so on.