Posts Tagged ‘Outsourcing’

 

Remanufactured in the USA

For years,U.S.companies have found that by outsourcing to developing nations, they can save money on labor and manufacturing costs, while maintaining stable transportation costs. Many companies, especially smaller or new ones, are not equipped to handle all the aspects of their businesses in-house. Due to the costs of purchasing and setting up equipment, as well as training a staff, it is often more cost effective to outsource some activities to other companies who specialize in specific areas.

But that tide seems to be turning now, as developing nations are growing and becoming economically more viable. Due to increasing wages and transportation costs overseas, the cost of doing business offshore is rising.

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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.

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