Deciding to take your manufacturing out of the country to increase production, efficiency, and growth is a step in the right direction. Though, just as important is deciding where to take that operation. Your first thought may be to go offshore – since it is cheap and that’s what most people are familiar with. While there may be advantages to this, there is a good chance you will find nearshoring your best option. Here are 5 reasons why.
1. Communicate During Business Hours
One of the biggest issues with offshoring is the time difference. While it may not seem like too big of a deal initially, having to work with your contacts without being able to connect live during normal working hours can lead to strain.
The manufacturing process goes much more smoothly when everyone is on the same page. And being able to effectively communicate is a huge part of doing so. With nearshoring, you get a workforce that is essentially much closer to your working hours, give or take an hour or two difference. This is much more manageable than, say, a 14-hour time difference. As a result, every operation can flow much more smoothly. Time zone differences can pose much more challenges than one may think!
2. Reach Your Market Faster with Geographic Proximity
You have your products manufactured offshore. Once they are done and ready to be sent out into the market, what do you do? That’s right – you wait. Your shipment will likely make its way to you in freight containers via cargo ships. A long trip along the large sea can lead to a long wait for your finished goods.
Being in close geographic proximity with your nearshore manufacturer means receiving your product at a much faster rate. You may even be able to receive them the same day or the next day during a rush situation. Crossing product from Mexico into the US can be done on a same-day or next-day basis; this is simply not realistically obtainable with an offshore manufacturer.
When the end goal is getting your product in the hands of customers, you don’t delay. Take the fastest route and prioritize global proximity.
3. More Cost-Effective Overall
It’s true – transferring your manufacturing process to an offshore company can greatly reduce your costs. Historically, Asia is known for cheap labor; however in recent years Mexico’s labor increases have slowed in comparison to Asia which has made nearshore companies much more competitive.
Costing models are not based solely on labor. Offshoring means having to make adjustments for currency, time difference, workforce hours, travel, and the like. And, let’s not even talk about the cost of shipping – both time and money. All of this decreases your operational efficiency and could cost you much more over time. In addition, there is no value in compromising quality.
Nearshoring, depending on where you are in the U.S. can be similar to sending your manufacturing process to the next state over. You can continue to operate business as usual while still taking advantage of the lower labor costs in Mexico and other Latin American countries.
4. An Increase Cultural Similarities
Explaining your visions and concerns to someone else is not always the easiest thing to do. When trying to do this with those from a different culture – and with a potential language barrier – sometimes things get lost in translation. This is often the case with offshore manufacturers.
When working with nearshore manufacturers, there is a closer connection in communication, and shared similarities in culture and social customs, for example. This makes working together to reach the goal a much easier process. Make sure to confirm your key contacts will be capable to speak English.
5. Access to a Stronger Workforce
The workforce in manufacturing facilities around the world is often skilled and knowledgeable. Many are literate and able to communicate effectively in English with businesses throughout the United States. However, one of the best features of nearshore manufacturers is the available workforce. The pool of workers is of a much higher quality than you will find in offshore countries.
Not only does this mean they have higher literacy rates and can complete the task they are trained to do, but it also means they do so with higher quality. And, that’s worth a lot when it comes to receiving a perfect finished product.
Learn More About Nearshoring at Coastline International
If you are ready to learn more about why you should consider nearshoring vs. offshoring or you are ready to choose your next contract manufacturer, contact Coastline International at (888) 748-7177 or contact us online.