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INSIDE CI: Too Good to Be True?

April 1, 2011
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A representative from my cell phone company recently called and excitedly told me that I could upgrade my phone for FREE if I changed my plan and paid $20 more each month. I ran through a number of responses in my head, ranging from "You've got to be kidding," and "Do you take me for a fool?" to "Please define free for me." In the end, I decided it was one of those "if you don't have anything nice to say, don't say anything at all" kind of moments. I just laughed and said, "No, thank you."

On the surface, the concept of offshoring might seem like a great deal: moving operations overseas can enable manufacturers to dramatically slash costs and improve their profitability. But according to Harry Moser, founder of the Reshoring Initiative, when companies look deeper into the details of offshoring-particularly the logistics involved-additional costs become readily apparent.

"According to a 2009 survey by Archstone Consulting, 60% of manufacturers use only rudimentary calculation methods to determine what it costs them to offshore," he says. "On average, they miss about 20% of the total costs of offshoring."

Additional costs typically come in the form of travel, packaging, shipping and inventory, to name just a few. To help manufacturers calculate the true costs of offshoring, The Reshoring Initiative has developed a spreadsheet that includes a number of variables, both tangible and intangible.

Moser will discuss these issues in detail when he delivers the keynote address at Tech ManufactureXPO, a live virtual event that will be held May 4. Co-sponsored by ASI, our sister publication, the free event will enable attendees to save on travel costs while gathering information and networking with peers-all from the comfort of their office. Learn more in "Bringing It All Back Home."

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