Faced with the pressure to produce high quality products at lower and lower costs, many American companies have decided to set up production overseas. However, despite the lure of cheaper labor in locations like China, Taiwan, and India, offshoring isn't without drawbacks.
If you think offshoring is the only option to keep your business alive and ahead of the competition, you're wrong. Robotic automation provides a viable alternative. There's less risk and none of the hidden costs commonly associated with offshoring. Robots could be your company's ticket to survival on home soil.
A New Trend: Reshoring
In light of increasing problems with offshoring, some companies are starting to return manufacturing and service jobs to the U.S. This new movement goes by many names, including reshoring, onshoring, and insourcing. According to a recent report from CNBC, Caterpillar is thinking about this option, and General Electric, Wham-O, and Ortho Mattress are returning production to the states after realizing the many advantages.
The Benefits of Onshoring with Robots:
- Quick return on investment (ROI) - Although robots require an initial investment, they quickly pay for themselves. A robotic welding system for example, is capable of doing the work of as many as four manual welders. Take a look at the robot ROI calculator.
- Reliable Quality - Industrial robot performance is consistent, quick, and repeatable. With the introduction of robots expect to improve product quality significantly.
- Cycle Times - Robots are capable of providing efficient, consistent production speeds. The resulting throughput is much more calculatable. Plus, robots can work 24/7.
- Flexibility - Ever flexible and quick to reprogram, robots can accommodate product, packaging, and a host of other changes to design and application.
- Less Waste - Robots are environmentally-friendly. They can work in lights out facilities and their efficiency and repeatability minimizing waste.
- Jobs, Stronger Economy - American companies have been offshoring for decades and it is taking its toll. It has contributed to America's soaring unemployment rates, which are currently hovering just below 10% (BLS). Robots allow you to be a part of the nation's economic recovery.
- Tax Benefits - The recently passed Small Business Jobs Act, which includes the Section 179 provision, makes it even more beneficial to invest in robots now.
Still weighing the pros and cons? Let's take a closer look at some of the difficulties that go along with offshoring a business.
The Siren's Call: Disadvantages of Offshoring
Offshoring is far from risk-free. Companies that choose to offshore often face unexpected difficulties and costs. If you're considering this option, make sure to check your math and make sure it's really as good a deal as it seems at first.
- Lost cargo issues
- Delays in delivery
- On the water costs
Host Country Risks:
- Government instability
- Exchange rates changing over time
- Language barriers
- Quality management long-distance
- Long lead times
- Potentially training competitors
- Wage increases (most recently in China)
For more information about re-shoring, on-shoring, or in-sourcing with industrial robots, call RobotWorx at 740-251-4312.