Outsourcing vs. Offshoring for After Market Services

U.S.companies that have historically turned to outsourcing their products and services overseas as a way to cut costs and increase profits may soon see a reversal of this trend.

According to their Bureaus of Labor Statistics, wages inChinaandIndia(the top two countriesU.S.manufacturers have utilized for outsourcing) have risen significantly in the last decade, withChina’s increase in wages at a whopping 19% andIndia’s a few percentage points higher than that. Meanwhile, in theU.S., the rate of job growth has remained at a steady 3%. It won’t be long before what once was a significant gap in payroll expenditure will be leveling out.

In addition to increased offshore wages, companies must consider:

  • Transportation costs
  • Unpredictable turnaround times
  • Lower product quality
  • Increased angst among consumers toward companies that outsource out of country
  • Possibility of taxes being placed on imported goods into theU.S.

As you can see, the savings from offshore outsourcing decrease incrementally and could make the practice a thing of the past.

That doesn’t mean outsourcing is not still a viable alternative for many companies, but it would make more sense to outsource WITHIN the U.S. as opposed to overseas. This is especially true in the area of remanufacturing technology products.

As environmental groups place more and more pressure on the state and federal governments, regulations are mounting to make manufacturers liable for the use and disposal throughout the lifetime of the product, even if it is out of their control. By outsourcing end-of-life products to companies that specialize in logistics and processes needed to ensure compliance by repairing, reconditioning, remanufacturing and recycling products, manufacturers and wholesale/retail outlets can see an increase in profit and a decrease in liability from fines and legislative review.

In the case of e-waste, electronic items such as computers, microwaves, video games, monitors, cell phones and other products that are nearing the end of their useful life, there are many more considerations than landfill space to consider. Without proper control and disposal methods, the toxic portions of these items will damage our environment, infrastructure and water supplies even more than it already has.

A reputable electronics manufacturing business can not only handle the increasing amount of e-waste (due to new technology and the need to get the latest and greatest devices), they can bring the majority of them back to life where they can re-enter the marketplace, bringing additional profit and lost revenue to the wholesaler/retailer, and reducing the liability to the manufacturers.

How much of your current business is turned over to brokers for offshore shipment that could be dealt with locally by different means, such as advanced bio-refining processes, repairing, reconditioning or remanufacturing? Are you certain you are getting all the useable parts out of the item before you dispose of it, and are you sure you are disposing of the waste in compliance with new and increased regulations?

A U.S.-based reverse logistics and after market services partner can help your company:

  • Establish a more cohesive supply chain
  • Capture lost profit/revenue through the repair, remanufacture and repurposing of electronic equipment
  • Adhere to environmental regulations and business standards

Find renewed strength by outsourcing your work within theU.S.borders, while also helping the local economy by bringing more jobs back home.

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